This morning (December 27th), Zhejiang Dragon Technology Co., Ltd. (Dragon Technology) rang the bell for its listing on the Shanghai Stock Exchange, with an opening price of 36 yuan per share and a total market value of 8.479 billion yuan. With this, the first company of hair dye raw materials in has officially emerged.
Public information shows that Dragon Technology was established in 2007 and is a technology-driven high-tech enterprise focused on the research, production, and integrated sales of fine chemicals. Its main products include hair dye raw materials, specialty engineering materials monomers, and plant protection materials, serving various application fields such as cosmetics, plant protection products, and specialty engineering materials.
Looking at the financial data, for the four reporting periods from 2020 to June 2023, Dragon Technology achieved revenues of 644 million yuan ($90.11 million), 701 million yuan ($98.1 million), 831 million yuan ($116.28 million), and 376 million yuan ($52.61 million), with corresponding net profits of 81 million yuan ($11.33 million), 90 million yuan ($12.59 million), 153 million yuan ($21.4 million), and 108 million yuan ($15.11 million), respectively. The company expects to achieve a net profit attributable to shareholders of the parent company of 160 to 180 million yuan ($22.39 million-$25.19 million) in 2023, representing a year-on-year increase of 6.20% to 19.47% compared to the previous year.
As the core business of Dragon Technology, the revenue contribution of hair dye raw materials accounted for 67.99%, 69.20%, 70.76%, and 77.47% of the main operating revenue, showing a steady upward trend. Its major customers include well-known enterprises such as L’Oréal, Henkel, and Coty/Wella, and the supplied products represent approximately 30% to 50% of their demand. In addition, Dragon Technology also supplies hair dye raw materials to multiple customers such as Lowenstein, Deimos, AlfaParf, and Huwell.
It is worth noting that in the “Announcement of Initial Public Offering and Listing on the Main Board,” Dragon Technology mentioned factors such as reduced production load during the Hangzhou Asian Games, maintenance of certain production lines in August 2023, and fluctuations in customer demand for its trading business. As a result, the company’s operating revenue and net profit for the third quarter of 2023 are expected to decrease by 36.06% and 17.27%, respectively, compared to the third quarter of 2022.
Compared to comparable companies such as CONSYS, Sino-High (China) Co. Ltd., Lianhetech, and Guansen Technology, Dragon Technology’s gross profit margin is on par, and its operating revenue scale surpasses Xinhan New Materials and Guansen Technology. Dragon Technology is one of the few domestic manufacturers with independent production capabilities of PBO (poly-p-phenylene benzobisoxazole fiber), which is known as the “super fiber” of the 21st century, demonstrating strong market competitiveness.
In this IPO, Dragon Technology plans to raise funds for the construction of a project with an annual output of 1,320 tons of specialty material monomers and hair care auxiliary agents. After the completion of the funded project, the production capacity of specialty engineering material monomers and hair dye raw materials will be further expanded. It is estimated that the project will generate an additional annual sales revenue of 691 million yuan ($96.7 million) and a total profit of 292 million yuan ($40.86 million).
