Anew Health taps investor ‘Qi’ with Nasdaq listing plan

The Hong Kong-based provider of pain relief services using traditional Chinese principles aims to raise about $7.2 million through its U.S. listing, valuing it at up to $200 million

Key Takeaways:

• Anew Health has filed for a U.S. IPO, aiming to sell investors on its use of techniques based on traditional Chinese medicine principles to treat pain
• The Hong Kong-based company plans to raise about $7.2 million, about half earmarked for expanding both at home and in other markets with big Asian populations

By Doug Young

Traditional Chinese medicine (TCM) has found a comfortable niche alongside more mainstream Western treatments, spawning a small but healthy range of publicly traded companies for medically minded investors. Now, Anew Health Ltd. (AVG.US) is getting ready to serve up a variation on the TCM theme, offering investors its TCM-based approach to treat pain relief with its plan for a Nasdaq IPO.

The operator of a Hong Kong-based chain of pain relief centers plans to raise at least $7.2 million by selling 1.8 million of its shares at between $4 and $6 each, according to an updated prospectus filed with the U.S. securities regulator on Sept. 2. The share issue represents about 3.5% of Anew’s expanded share capital and is a downsizing from the company’s earlier plan to raise about twice as much.

From our perspective, Anew looks interesting for its less conventional approach to the lucrative field of pain management. The company is both profitable and also in expansion mode, with plans to use more than half of its IPO proceeds to expand both in Hong Kong and into other markets with large Asian populations. It’s also seeking a relatively high valuation compared with some of its more traditional Western peers, hoping investors will like its relatively unique positioning and its strong profitability.

Established in 2007, the company operates four pain management centers in Hong Kong under the ANKH brand, which stands for “a new key to health.” It uses non-invasive, non-pharmacological treatments with a Chinese approach that focuses on a person’s internal vital energy, or Qi, that travels through pathways throughout the body.

“According to the traditional Chinese medicine theory, the stagnation, blockage, or the deficiency of the flow of Qi, are the root cause of pain and illness,” the company said. It adds it uses TCM concepts, combined with modern technology like lasers, bioelectrical current, electromagnetic waves, radiofrequency and ultrasound, to correct deficiencies in a patient’s energy and relieve pain.

In addition to its therapies, the company also offers a range of its own private label, over-the-counter topical products, including creams, moisturizers, ointments and dietary supplements. But such products only account for a very small part of its revenue.

Anew’s revenue totaled $40 million in its latest fiscal year through March 2025, down slightly from the $40.8 million it generated the previous fiscal year. But its contracted sales rose nearly 20% over that period to $39.5 million from $33.2 million.

Despite the revenue decline, most of the company’s key customer metrics also rose. That included average spending per customer, which was up 3.2% year-on-year to $6,478 in Anew’s latest fiscal year; and the number of customers served at its service centers, which rose by a faster 15.5% to 10,039 from 8,692 the previous year. The company points out that its customers are generally quite happy with its service, with 81.7% of 846 surveyed in its fiscal year through March 2024 saying they were satisfied and about 70% saying the treatments they received helped to alleviate their pain.

Expansion mode

From an investor standpoint, one of the most interesting things about Anew is that it appears poised to expand from its modest base, both within Hong Kong and also internationally. Of the funds it plans to raise through the listing, the company said 30% will go to setting up a new service center in Hong Kong, while another 25% will go to setting up centers in other markets.

“We plan to grow and strengthen our market position in the pain management services market through both organic growth and strategic acquisitions of and investments in services centers in fast-growing, populous regions all over the world to further extend our footprint,” it said in its prospectus.

Countries the company is currently considering include Singapore, Malaysia, Japan, South Korea, Canada, and the U.S., which Anew says “either have familiarity with TCM or Chinese culture or have a significant concentration of Asian ethnic groups, in recognition with the traditional Chinese medicine theory and methods.”

The company has been building up its headcount in preparation for that expansion – a factor that contributed to a jump of nearly 50% in general and administrative spending during its most recent fiscal year. The company’s headcount totaled 175 at the end of March this year, up 19% from the 147 people it employed 12 months earlier. Many of the new hires were operation and support personnel to support the expansion, with that number rising to 74 at the end of this March from 55 a year earlier.

The company also cited the large headcount increase as a factor behind the 16.8% rise in its cost of revenue for its latest fiscal year, which was faster than its revenue growth, eroding its gross margin. On the bottom line, the company’s net income fell by about half to $5.5 million in its latest fiscal year from $11.7 million a year earlier. It cited costs associated with its expansion, as well as one-time discretionary bonuses totaling $1.28 million to its directors.

We should also point out that the company had a working capital deficit of about $7.8 million at the end of March this year, which its accountant flagged as a potential concern. But such a deficit is largely an accounting issue, indicating its liabilities were larger than its assets by that amount, and Anew said it believes its funds are sufficient to meet its operating and capital spending needs for the next 12 months. Its cash position also looks relatively solid, with $11 million in its coffers at the end of last September.

An offer at its stated price range would value Anew at between $200 million and $300 million, implying a price-to-sales (P/S) ratio of between 5 and 7.5. That tends toward the upper end of what its global peers trade at, higher than the 2.58 and 3.06 for OneSpaWorld Holdings (OSW.US) and Scilex Holding (SCLX.US), respectively, but below the 9.05 for Hinge Health (HNGE.US).

Such a premium might be partly deserved, since Anew is profitable, unlike most of its peers. At the end of the day, the company could be an attractive alternative to medical investors looking for a variation on traditional pain treatment with some good growth potential.

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