{"text":[[{"start":7.99,"text":"-"}],[{"start":8.33,"text":"It was once seen as a greenfield for huge potential growth in China, feeding off the rise of a new middle class eager to improve their smiles and oral health. But these days, the nation’s dental sector is rapidly losing that polish, hampered by a slowing economy, as well as pressures from Beijing’s efforts to control costs through central procurement programs."}],[{"start":34.11,"text":"Into that wash, dental materials supplier Huge Dental Ltd. is making a new attempt to attract investors with its latest filing for a Hong Kong IPO last week. Huge Dental is no stranger to capital markets, having previously listed on Beijing’s thinly traded National Equities Exchange and Quotations (NEEQ) market and making several attempts to list on the larger A-share markets in Shenzhen and Shanghai. It filed to list in Hong Kong last year, but never completed that plan and is now trying again."}],[{"start":69.78999999999999,"text":"It’s hard to see how Huge Dental will stand out in a Hong Kong IPO market that has been extremely hot lately but also quite crowded. Most attention has gone to high-tech companies in emerging sectors like robotics, AI and microchips. Dental products and services look much more mundane, even though they once excited investors for their big growth potential."}],[{"start":94.13999999999999,"text":"Making matters worse, Huge Dental’s growth ground to a halt last year amid growing competition, and as Chinese reined in their spending and the company’s overseas business hit a tariff roadblock in the U.S. The company does have one potentially more positive story to tell in its global expansion plan, which would focus on the more promising Southeast Asian, Indian and European markets using an offshore production base it’s developing in Indonesia."}],[{"start":123.83999999999999,"text":"Hong Kong has become quite the hot spot for dental offerings these last few years, as many companies listed on the exchange when the outlook for their industry was brighter. Recent arrivals include Meihao Medical (1947.HK) and Arrail (6639.HK), both listed in 2022, and Dazhong Dental (2651.HK), which listed last year."}],[{"start":151.87,"text":"But none of those has done very well since their listings, with Dazhong and Meihao both now down about 60% from their listing prices. Arrail was down by an even bigger 87% before its shares were suspended last November after a dispute with its auditor."}],[{"start":170.65,"text":"Despite that gloom, Huge Dental’s listing boasts a relatively strong cast of underwriters in CICC, DBS and Daiwa, indicating the IPO could raise some substantial funds despite the company’s relatively small size. Most of its peers currently trade at relatively modest price-to-earnings (P/E) ratios of about 10, which would only value Huge Dental at around $100 million, based on its profits from the last couple of years."}],[{"start":201.24,"text":"The company is a relatively strong player in China’s dental materials market, which includes materials to make things like dentures, crowns and synthetic teeth. That market was worth 30 billion yuan ($4.4 billion) in 2024, and is expected to grow 15% annually over the five years from then to reach 66.1 billion by 2029, according to third-party market data in the prospectus. Huge Dental controlled about 1.3% of the market in 2024."}],[{"start":235.67000000000002,"text":"Flatlining growth"}],[{"start":237.71,"text":"While China’s dental materials market may be growing by double-digits, the same can’t be said for Huge Dental’s own business. The company reported revenue of 400 million yuan for 2025, basically unchanged from the 399 million yuan the previous year, according to its listing document. That marked a slowdown from the 12% revenue growth the company reported in 2024, and reflects growing competition as more local players enter a sector traditionally dominated by foreign names."}],[{"start":271.7,"text":"Huge Dental currently gets about two-thirds of its revenue from China, and that figure also flatlined at about 271 million yuan in both 2024 and 2025."}],[{"start":286.2,"text":"Many drug and medical device and material makers have been taking a hit lately as China uses its clout to bargain for lower prices through bulk procurement. Huge Dental said a couple of its products have been subject to such pricing pressure, though they currently account for a relatively small part of its business. Still, that element could remain a future vulnerability if China, where most people get their medical services through state health plans, extends its bulk procurement to some of the company’s other products."}],[{"start":317.68,"text":"Europe is Huge Dental’s largest global market, accounting for about 14% of its sales last year. The U.S. was the second largest, but the company saw revenue from that market tumble 42% last year to 16.5 million yuan due to tariff fallout and also the loss of a major customer."}],[{"start":339.18,"text":"The company said that one of its plans to jumpstart growth is through accelerating its global expansion, which will be centered on a facility it’s building in Indonesia. It said the first phase of that plan will involve expansion in Europe, Southeast Asia and India. In particular, the company plans to set up a subsidiary in Europe as soon as this year to sell more of its products directly, which would boost its margins from its current near-exclusive reliance on third-party distributors in that market."}],[{"start":372.28000000000003,"text":"It conceded that the U.S. won’t be part of its near-term expansion until the tariff situation becomes clearer, and added the Middle East could be another market for future expansion."}],[{"start":383.83000000000004,"text":"Like many of its peers, Huge Dental grew up during headier times when China’s economy was posting high single-digit and even double-digit growth, feeding off demand from the nation’s new middle class. It was founded in 2006 in Eastern China’s Shandong province, making it one of the earlier Chinese companies to enter the dental materials field."}],[{"start":408.52000000000004,"text":"Apart from its flatlining revenue, the company’s other major worry is its falling profit. Its gross margin looks relatively solid, holding steady at around 58% over the last three years. But rising marketing and administrative costs, due to competition at home and its overseas expansion, caused its profit to drop 38% last year to 47.7 million yuan from 76.6 million yuan in 2024."}],[{"start":440.6,"text":"All that said, the big picture for Huge Dental is decidedly mixed. Its China business is facing quite a few headwinds from competition and a slowing economy, though its overseas expansion could help it return to growth on both its top and bottom lines. But perhaps the biggest immediate challenge for the company will be attracting investor attention to its IPO in a market where flashier tech offerings are drawing most of the spotlight."}],[{"start":479.47,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1772535142_3962.mp3"}