Company Overview - Company is a technology-driven leader in the global folding bicycle industry, focusing on R&D, design, and global marketing of folding bicycles and related products [1] - The product line includes over 70 models, covering various categories such as folding bikes, road bikes, mountain bikes, children's bikes, and electric assist bikes [1] Industry Position - Company is the largest folding bicycle manufacturer globally, achieving a retail volume of 226,400 units in 2024, capturing 6.2% of the market share [2] - The company holds 26.3% of the retail volume share and 36.5% of the retail value share in the folding bicycle industry, leading the second competitor by over 10 percentage points [2] - Company possesses 130 global patents, including 113 valid patents in mainland China and 22 in Europe, the US, and Japan, enhancing its competitive edge [2] Financial Performance - Revenue growth from 2022 to 2024 was significant, with figures of 250 million, 300 million, and 450 million RMB, respectively, reflecting a compound annual growth rate (CAGR) of 33.1% [3] - Gross profit for the same period was 77.93 million, 101.49 million, and 148.75 million RMB, with a CAGR of 38.1% [3] - In the first four months of 2025, revenue reached 180 million RMB, a year-on-year increase of 46.9% [3] Sales and Revenue Dynamics - The core growth driver for revenue is the optimization of product structure, with mid-range products (priced between 2,500-5,000 RMB) becoming the main revenue engine [8] - The revenue share of mid-to-high-end models increased from 44.9% in 2022 to 69.5% in 2024, with the average product price rising from 1,593 RMB to 1,966 RMB over three years [8] Challenges - The global folding bicycle market growth rate is slowing, with a projected CAGR of 7.3% from 2024 to 2029, compared to 13.4% from 2019 to 2024 [11] - The company's reliance on the domestic market is increasing, with domestic sales accounting for 93.4% of total revenue in the first three quarters of 2024 [13] - High dependency on OEM manufacturers for production, with over 65% of production outsourced, leading to potential quality control issues and lower profit margins [14] IPO and Future Strategy - The company plans to raise 1.5 billion HKD through an IPO, with funds allocated for production system upgrades, channel optimization, and R&D enhancements [18] - The strategic focus includes increasing the revenue share of electric products from 8% to 30% and expanding the Southeast Asian distribution network [18] - The company aims to enhance its product matrix by developing new categories such as electric assist bikes and children's bikes to meet diverse consumer demands [19]

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].

Core Viewpoint - The leading global folding bicycle brand, Dahang Technology, is preparing for an IPO on the Hong Kong Stock Exchange, having received a registration notice from the China Securities Regulatory Commission, with plans to issue up to 9.1 million shares [1][4]. Group 1: Market Position and Technology - Dahang Technology holds a 21.1% market share in China's folding bicycle market and a 5.6% share globally, making it the industry leader [4][7]. - The company has built a strong technological moat over 40 years, with 108 valid patents in mainland China and 22 patents in markets like the US, Europe, and Japan [5]. - The classic model P8 has sold over 120,000 units, showcasing the brand's enduring popularity [7]. Group 2: Financial Performance - For the first three quarters of 2024, Dahang Technology reported revenue of 352.24 million RMB, a 58.7% increase year-on-year, and a net profit of 45.84 million RMB, up 74.1% [10][11]. - The company's sales volume surged by 51.5% year-on-year, reaching 175,200 units [10]. Group 3: Product and Market Dynamics - Dahang Technology's product range has expanded from a single folding bike to over 70 models, including road bikes, mountain bikes, children's bikes, and electric assist bikes [7]. - The mid-range products (priced between 2,500 and 5,000 RMB) have become the growth engine, with sales in this segment nearly doubling since 2022 [13]. - Online direct sales have increased significantly, with revenue jumping from 14.1 million RMB in 2022 to 58.1 million RMB in 2023, marking a growth rate of 312.1% [13]. Group 4: Challenges and Risks - Despite leading the market, Dahang Technology faces challenges such as concentrated ownership, declining overseas sales, and a low industry ceiling [4][9]. - The company's overseas sales dropped from 56.16 million RMB in 2022 to 23.39 million RMB in 2024, indicating difficulties in expanding in international markets [15][16]. - Quality issues have arisen from the reliance on OEM production, with numerous consumer complaints regarding product defects [17]. Group 5: Governance and Ownership Structure - The founder, Dr. Han Dewei, controls 88.56% of the shares, raising concerns about governance and decision-making continuity [18][20]. - The company has a history of shareholding complexities, with past employee shareholding arrangements that have drawn regulatory scrutiny [20]. Group 6: Future Outlook - Dahang Technology plans to use IPO proceeds to expand production capacity to 200,000 units, despite concerns about dividend distributions prior to the IPO [22]. - The company aims to transition from a niche folding bike manufacturer to a broader bicycle brand, with new product lines and market strategies [22].