Investment Rating - The investment rating for the company is 6.1 out of 10, based on operational performance, industry outlook, valuation, and market sentiment [7]. Core Insights - The company is the largest folding bicycle manufacturer in mainland China, holding a market share of 26.3% by retail volume and 36.5% by retail value as of 2024 [1]. - The company has shown rapid growth, with a compound annual growth rate (CAGR) of 24.1% in sales from 2022 to 2024, and a significant increase in net profit by 69.3% year-on-year as of April 2025 [2]. - The folding bicycle market in China is expected to grow at a CAGR of 14.5% from 2024 to 2029, which is higher than the global average [3][10]. Company Overview - The company was founded in 1982 by Dr. Han Dewei and has a strong brand presence with popular models like the P8 [1]. - As of April 2025, the company collaborates with 38 distributors across 30 provinces in China, covering 680 retail points and has expanded its online sales channels [1]. - The product mix is primarily mid-range, with 69.5% of revenue coming from products priced between 2500-5000 RMB [1]. Financial Performance - Sales figures for the company were 148,956 units in 2022, 156,877 units in 2023, and projected 229,525 units in 2024, indicating a strong growth trajectory [2]. - Revenue for the same years was 254.2 million RMB in 2022, 300.2 million RMB in 2023, and projected 450.7 million RMB in 2024, with a CAGR of 33.1% [2]. - The gross profit margin has remained stable at around 33% as of April 2025 [2]. Industry Status and Outlook - The global bicycle market is projected to reach 178 million units in retail volume by 2024, with a CAGR of 1.7% from 2019 to 2024 [3]. - The folding bicycle segment is expected to grow significantly, with a projected retail volume of 3.7 million units and a retail value of 23.1 billion RMB in 2024 [3]. - Key drivers for market growth include urbanization, innovation in folding bicycle design, and increasing consumer preference for eco-friendly products [3]. Strengths and Opportunities - The company is recognized as a leading player in the folding bicycle industry with strong technical innovation and a diverse product portfolio [4]. - It has established a robust multi-channel sales and distribution network, enhancing its market reach [4]. - The management team is experienced and international, contributing to the company's strategic growth [4]. Use of Proceeds - Approximately 30% of the net proceeds from the IPO will be used for modernizing production systems and expanding operational scale [6]. - Another 30% will be allocated to strengthening the distribution network and strategic brand development [6]. - The remaining funds will support research and development capabilities and general corporate purposes [6].

Core Viewpoint - The rise in global health awareness and environmental consciousness is driving a new wave of consumption and investment in cycling, particularly in folding bicycles, which are favored by urban commuters and outdoor enthusiasts. Dahon Technology (Shenzhen) Co., Ltd. is accelerating its IPO process in Hong Kong, aiming to capitalize on this trend [1]. Market Position - Dahon Technology holds a significant position in the folding bicycle market in mainland China, with a market share of 26.3% in retail volume and 36.5% in retail value as of 2024 [1]. - The company sold 156,877 units in 2023, up from 148,956 units in 2022, and is projected to sell 229,525 units in 2024, reflecting a compound annual growth rate (CAGR) of 24.1% [2]. Financial Performance - Revenue for Dahon Technology was approximately RMB 254.2 million in 2022, RMB 300.2 million in 2023, and is expected to reach RMB 450.7 million in 2024. The profit for the same periods was RMB 31.4 million, RMB 34.9 million, and RMB 52.3 million respectively [3][2]. - The company’s revenue from domestic sales reached RMB 3.29 billion in the first nine months of 2024, accounting for 93.4% of total revenue, a significant increase from 77.9% in 2022 [10]. Production and Supply Chain - Dahon Technology's production capacity is limited, with its factory in Huizhou having an annual capacity of only 90,000 units. The company relies heavily on OEM production, with 56.8% of its 2024 sales depending on outsourcing [4]. - The cost of outsourced production accounts for 47.1% of the total sales cost, indicating a potential vulnerability in its supply chain [4]. Market Challenges - The company faces challenges in expanding its overseas market, with international sales dropping from 22.1% in 2022 to 5.6% in the first four months of 2025 [4]. - The folding bicycle segment is relatively small, representing only 5.3% of the global bicycle market, with the Chinese market size at RMB 1.4 billion in 2023 [4][11]. IPO and Future Plans - The IPO proceeds are intended for capacity expansion (adding 200,000 units by 2027), strengthening the distribution network, and enhancing R&D. However, there are concerns regarding the company's cash position, which decreased from RMB 108 million at the end of 2024 to RMB 59 million by April 2025 [5]. - The company is shifting towards high-end products, increasing the proportion of high-end bicycles from 44.9% in 2022 to 60.9% in 2023, in response to consumer trends [11][14]. Competitive Landscape - Dahon Technology is the leading player in the folding bicycle market, with a market share of 21.1% in 2023, significantly ahead of its closest competitor [16]. - Despite its strong domestic position, the company faces competition in international markets, where it lacks a significant advantage compared to other leading brands [16][17].