SunHo BioTech Group Ltd IPO - What You Need to Know

Hey there! If you’re thinking about investing in SunHo BioTech’s IPO, here’s the lowdown in plain English.

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1. What does SunHo BioTech do?

They turn organic waste (farm leftovers, city sewage, even manure) into fertilizer in 24 hours using their "Biomax Digester" machines. Traditional composting takes weeks, so this is like a turbocharged recycling system for organic trash. The fertilizer they make is odorless, safe for crops, and kills harmful bacteria.

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2. How do they make money?

• Sell machines: Biomax Digesters cost $$$ upfront (think farm equipment pricing)
• Lock-in recurring revenue: Customers must buy SunHo’s proprietary “BM1 enzyme” to keep machines running (like printer ink for farms)
• Fertilizer sales: They sell the compost produced by their machines to stores and farms
• Global expansion: Signed exclusive deals with distributors in Australia, USA, and New Zealand who must hit minimum annual sales targets

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3. What will they do with IPO money?

Raising $8.7 million (up to $10.1M if extra shares sell):

• 25% for acquisitions (no specific targets named yet)
• 18.5% for R&D (lab upgrades, machine improvements)
• 10% for marketing
• Remaining funds for daily operations and expenses

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4. Big risks to know

• Cash crisis: Auditors warn there’s “substantial doubt” they’ll survive the next year. They have S$1.54M cash left – only enough for a few months given they lost S$2.77M in 2024 alone.
• Currency gamble: Profits could shrink if the US dollar weakens against other currencies
• Optimistic forecasts: The company admits their financial projections might be “materially worse” in reality
• Regulation roulette: Sales depend on governments pushing eco-laws – if green policies slow, demand could drop
• CEO control: Founder owns 86% of voting power, with a leadership team that lacks pharma/agriculture experience

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5. Competitive edge

Machines work 10x faster than traditional composting while producing fertilizer that:

• Meets strict organic farming standards
• Eliminates odors and pathogens
• Can be sold directly to consumers

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6. Bottom Line

High-risk, high-reward bet on green tech.
👍 Potential upside: Could grow fast if global eco-regulations expand and distributors hit targets.
👎 Reality check: Burning cash rapidly, vague acquisition plans, and survival isn’t guaranteed.

Treat this like investing in a startup – exciting technology, but high chance of failure.

Not financial advice. Do your own research or consult a financial advisor. 😊

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Note: SunHo provided limited details about long-term debt management and acquisition targets in their filing – something to consider.