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New Third Board to List First Sex Toy Manufacturer's Stock

| Oct 14, 2015 07:59 AM EDT

Sex toys in China have become increasingly accepted and popular, with around 70 percent of sex toys in the world produced in the country.

The National Equities Exchange and Quotations, a stock exchange also known as the New Third Board (NTB), is set to list Zhejiang Lover Health Science and Technology Co. Ltd., a sex toy manufacturer, making it the first sex industry-related stock in the history of China.

According to the NTB, the company submitted an application on Friday to issue 79 million shares that can be purchased at 1 yuan ($0.15) per share.

The company released information that shows that sex toys account for majority of the company's sales revenue at 87.82 percent during the first five months of 2015. It has also enjoyed high profit margins, with its gross profit rate at 51.27 percent in 2014, growing from 43.94 percent in 2013.

The gross profit rate of the company during the first five months of this year is around 46.41 percent.

The company is still in debt worth 29.72 million yuan, having made losses amounting to 73.21 million yuan in 2013. During the first five months of this year, it lost another 11.36 million yuan.

The China Reproductive Health Industry Association said that the market value of China's reproductive health industry was around 48.7 billion yuan in 2007. Consumer expenditure on the industry has been growing by 15-30 percent per year.

"Competition is quite intense in the nation's reproductive health industry. Most of the products are sold online. The delivery of the products is highly reliant on logistics companies. Consumers who shop online are also more price-sensitive. As the industry is quite special and in its preliminary stage in China, Lover Health is facing problems like specific laws and regulations for publicity, industry supervision, market expansion, and customer education," said the company in a statement during its filing.

Sex toys have become more accepted in China in recent years. A 2010 report by Asiaone News said that 70 percent of the world's sex toys are manufactured in China.

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