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Leading companies in the folding bike industry have begun to make a "sprint" towards the Hong Kong Stock Exchange. Recently, Dahon Technology (Shenzhen) Co., Ltd. (hereinafter referred to as "Dahon Technology") submitted an application for listing to the main board of the Hong Kong Stock Exchange. Dahon Technology is a highly influential folding bike company in the industry, and its Dahon brand is well-known. According to Zuoshiping Consulting data, based on retail volume in 2023, Dahon ranked first in the folding bike industry in mainland China and globally, with market shares of 21.1% and 5.6% respectively. With its outstanding market position, not only that, but Dahon Technology's product sales are still rapidly growing. In the first 9 months of 2024, the company sold 175,200 bikes, a 51.5% increase compared to the same period last year. Thanks to its strong sales performance, in the first three quarters of last year, Dahon Technology's revenue and net profit reached 352 million yuan and 46 million yuan respectively, representing increases of 58.7% and 74.1% year-on-year. In the process of "marching forward", it seems that Dahon Technology's pricing strategy is an important winning weapon. It can be noted that in the past period, the average selling price of Dahon Technology's products has increased from 1,593 yuan in 2022 to 1,966 yuan in the first 9 months of 2024, an increase of over 20%. Combining with sales data, the increase in product prices not only did not discourage consumers, but also led Dahon Technology to achieve greater commercial success. However, it is worth mentioning that although Dahon Technology claims to be the world's leading folding bike company, the majority of its revenue comes from the domestic market. Especially after 2023, with the vigorous development of the domestic market, Dahon Technology's scale has advanced, but at the same time its overseas revenue has shrunk to less than 10%. Although the rapidly growing Chinese market is promising, even by optimistic estimates, the market size of folding bikes in mainland China is only about 3.8 billion yuan by 2028. Considering that Dahon Technology intends to enter a larger capital stage, the company may need to achieve further success in a broader market in order to gain broader investor recognition. Adding high-end products and timing the pace of industry development? From a global perspective, mainland China, the United States, and Europe are the three major sales regions of the global folding bike industry, accounting for 25.2%, 9%, and 8.6% of global demand respectively. Among them, mainland China is undoubtedly the most important market for folding bikes globally, with retail volume leading the world in 2023 and a compound annual growth rate of 19.1% from 2018 to 2023. For Dahon Technology, which was born and grown in China, it naturally has the advantage of being close to the water when looking from a global perspective. In fact, in the rapid expansion of the folding bike industry in mainland China in recent years, Dahon Technology has indeed seized the opportunity for development. Data shows that from 2022 to the first 9 months of 2024, Dahon Technology's revenue was 254 million yuan, 300 million yuan, and 352 million yuan respectively, with net profits of 31.43 million yuan, 34.85 million yuan, and 45.83 million yuan, showing a significant increase in core financial data. Looking at the market, the strong growth momentum in the Chinese market is the key to Dahon Technology's financial performance improvement. In the first 9 months of 2024, the company's revenue generated from domestic sales reached 329 million yuan, accounting for 93.4% of the overall revenue, with a year-on-year increase of nearly 60%, significantly higher than the growth rate of overseas sales of 44.4% during the same period. For comparison, in the whole of 2022, Dahon Technology's revenue from domestic market sales was 198 million yuan, accounting for 77.9%, which means that the share of revenue from the domestic market in the first three quarters of last year was 15.5 percentage points higher than in 2022. If the favorable industry environment has brought "favorable winds" to Dahon Technology, then the company's bet on the mid-to-high-end route and pricing strategy may provide a key DRIVE for its rapid development. It is understood that in recent years, more and more people in China are choosing specialized bicycles and mid-to-high-end bicycles, which has pushed up the production of bikes priced at 1,000 yuan and above. The compound annual growth rate of bikes priced at 1,000 yuan and above from 2018 to 2023 was 7.7%, and it is expected to increase to double digits in the coming years. As a leading company in the folding bike industry, Dahon Technology has keenly observed the above-mentioned trend and promptly responded to customer demand changes by adding more mid-to-high-end products. According to calculations, the share of mid-to-high-end products in Dahon Technology's product portfolio increased from 44.9% in 2022 to 60.9% the following year, and reached a new high of 69.5% in the first 9 months of 2024. At the same time as the continuous increase in the share of mid-to-high-end products, the average selling price of Dahon Technology's products has also risen. In the first 9 months of 2024, the average selling prices of Dahon Technology's mass market, mid-range, and high-end products were 1,292 yuan, 2,129 yuan, and 3,916 yuan respectively, compared to 1,128 yuan, 1,991 yuan, and 3,761 yuan in 2022. Perhaps it is also thanks to this, that Dahon Technology's profitability has been strengthened to a certain extent. From 2022 to the first 9 months of 2024, the company's comprehensive gross profit margin was 30.7%, 33.8%, and 33.5% respectively, showing a fluctuating upward trend. Will global breakthrough or long-term growth be the winner? From a holistic industry perspective, folding bikes can only be considered a relatively "mini" segment in the billion-dollar bike market. According to industry data, the global bicycle industry's market size based on retail value in 2023 was 374 billion yuan, while the market size of folding bikes in the same period was 168 billion yuan, accounting for less than 5% of the former. In addition, as mentioned earlier, mainland China is the largest single market for folding bikes in terms of retail volume, accounting for one-fourth of global demand. In a sense, the folding bike sector can be considered as "those who get the Chinese market get the world". Indeed, in 2023, Dahon Technology sold about 149,000 folding bikes in mainland China, with a market share of 21.1%, while the sales of the industry runner-up in this market during the same period were only 97,000 units, which means that Dahon Technology has achieved a clear lead. HoweverLooking back at the global market, the sales volumes of Da Heng Ke Gong in 2023 reached 157,000 vehicles. While still in first place, the difference in sales between them and the second place is actually less than 70,000 vehicles. Cross-referencing the data from both groups, it is easy to see that outside of mainland China, Da Heng Ke Gong does not have any significant advantage compared to the top competitors in the industry.Looking at the development trend of the next stage, the market size of folding bicycles in mainland China is expected to maintain a high-growth momentum and reach 3.8 billion yuan by 2028, with a CAGR of approximately 22.1% from 2023 to 2028. It is also driven by the market in mainland China that the global folding bicycle market from 2023 to 2028 will continue to grow at a high speed with a CAGR of 14.8%, reaching a market size of 33.5 billion yuan by 2028. Although the growth rate of the mainland China market is faster, the size of a single market is limited. Considering that Da Hang Ke Gong's market share in the domestic market has exceeded 20%, for top companies like Da Hang Ke Gong, if they want to make further progress, achieving global breakthroughs in their business is essentially a "must-answered question." According to the statements in the prospectus, Da Hang Ke Gong is indeed planning to expand its business in Southeast Asia, South America, North America, and Europe, and to expand its global influence through various measures. However, this also means that the company will have to compete closely with local brands in Europe and America, and only time will tell how effective this strategy will be. Relying on deep cultivation of the mainland China market, increasing investment in high-end products, and continuous price increases, Da Hang Ke Gong has achieved a "growth acceleration" in the field of folding bicycles. However, in the face of the discerning capital market, past performance alone is obviously not enough to impress investors. As the road ahead is filled with opportunities and challenges, the growth certainty and resilience of Da Hang Ke Gong will be tested by time, and GMTEight will continue to monitor the situation.