Chinese consumers are paying increasingly more attention to oral care, and companies like Dencare are ready to catch this opportunity.
Oral care company Dencare formally submitted a prospectus to be listed on the main board of the Shenzhen Stock Exchange in June.
The firm intends to raise CNY 660 million in funds through the IPO, which will in turn be invested to complete manufacturing upgrades, omni-channel marketing network upgrades, brand promotion, oral health research center and digital management platform construction.
Founded in 2011, Dencare is a Chongqing-based company that focuses on oral care. It owns a number of brands including Lengsuanling (Chinese: 冷酸灵), with cumulative sales of over 9 billion units. Besides, the company has premium brands like Yiyan (Chinese: 医研) and ones specifically designed for children such as Kechi Kechi (Chinese: 贝乐乐).
According to the prospectus, Dencare’s revenue increased from CNY 944 million in 2019 to CNY 1.1 billion in 2021. The jump in revenue of 21% can be considered decent.
Moreover, the company’s net profit also improved during the same period. In 2019, the firm recorded a net profit of CNY 63.2 million, while it surged by 88% to CNY 119 million in 2021.
Nonetheless, Dencare faces intense competition from its rivals. In 2021, the annual national output of toothpaste manufacturers exceeded 671,700 tons, while the top ten enterprises produced a total of 493,300 tons, accounting for 73.44% of the total.
The market is highly concentrated and competitors such as Crest, DARLIE and Colgate (CL:NYSE) are eager to boost their revenue for more shares.