Aidite (Qinhuangdao) Technology Becomes the First Oral Healthcare IPO of 2024

The long-dormant secondary market for dental care has finally seen some good news.

Today, the first dental IPO of 2024 has emerged—Aidite (Qinhuangdao) Technology Co., Ltd. (hereinafter referred to as “Aidite”) listed on the ChiNext board. Behind the company are prominent investors including Legend Capital,CICC Qichen, CITIC Securities,Chende Capital, Xiamen Jianfa Venture Capital, Alibaba Network, and other investors.

As a leading enterprise in China's dental restoration field, Aidite has focused on the research and development and production of dental restorative materials such as zirconia blocks since its establishment, andGradually expanded into the current three major product systems: First,Dental Restorative Materials, including zirconia ceramic blocks, glass ceramics, and resins; secondly,Digital Dental Equipment, including digital imaging equipment, milling equipment, sintering equipment, etc.; thirdly,Other Products and Services, including oral preventive products such as fluoride foam and fluoride varnish, as well as orthodontic products.

The prospectus shows that Aidite’s total revenue in 2021, 2022, and 2023 was RMB 545 million, RMB 603 million, and RMB 780 million, respectively, with a compound annual growth rate (CAGR) of 19.63%; the net profit attributable to shareholders of the parent company for these three years was RMB 55 million, RMB 116 million, and RMB 147 million, respectively, with a CAGR of 62.95%, demonstrating strong profitability.

(Data source: Prospectus)

It is worth mentioning that,Amid the surging wave of Chinese medical innovation enterprises expanding overseas, Aidite has established a global market network., its products are exported to more than 120 countries and regions across Europe, the United States, Japan, South Korea, and beyond, making it a long-term partner of dental prosthesis manufacturers in the United States, Germany, France, Japan, South Korea, and other countries.

What business strategies have driven the product’s global success? What strategic layout will the company adopt after its listing? How will the dental industry evolve in the future? To explore these questions, VCBeat interviewed Legend Capital, the early institutional investor behind Aidite, and analyzed data from the prospectus to seek insights into the answers.

Aidite’s story began in 2007.

At that time, Li Hongwen and Li Bin jointly founded the predecessor of Aidite—Qinhuangdao Aidite High-Tech Ceramics Co., Ltd., which was primarily engaged in the research and development, manufacturing, and sales of zirconia ceramic raw materials and products.

That is to say,Since its inception, the research and development of zirconia materials has been the most distinctive hallmark of Aidite.

“Unlike other dental device companies that lean more toward precision manufacturing, Aidite is a rare player in the industry that prioritizes material innovation,” Wang Haihua, Investment Director at Legend Capital, told VCBeat.

From a timeline perspective, Aidite's innovation rhythm in zirconia materials is as follows:

It is evident that, as one of the first companies in China to apply zirconia materials to dental restoration, Aidite has continuously enhanced the aesthetics and physical properties of its dental restorative materials, thereby growing into a leading domestic provider of oral restorative materials.

Through long-term research and development of zirconia manufacturing processes, Aidite has established a comprehensive product portfolio covering high-, mid-, and low-end segments. Its high-end product line has reached an internationally leading position, achieving import substitution. According to the prospectus, Aidite’s domestic market share for zirconia dental restorative materials reached 6.21% in 2020.

In addition to zirconia ceramic blocks, AiditeIt has also successively expanded into dental restorative materials such as glass-ceramics and resins., establishing strong brand recognition within the industry: Aidite was one of only two domestic dental crown brands featured in the Top 10 Dental Crown Material Brands list jointly released by CN10/CNPP Data Research and Top 10 Brands Network; in 2023, Aidite ranked first among the four major domestic dental material companies in terms of revenue scale.

(Data and product images sourced from Aidite’s official website and prospectus; graphic by VCBeat)

Beyond restorative materials, Aidite also identified strong demand among downstream customers for dental equipment capable of digital precision machining and improving denture manufacturing efficiency, thusIn 2018, Aidite began to vigorously expand its dental digital equipment business., to meet customer needs and align with industry trends.

As of now, Aidite’s portfolio of dental digital equipment includes digital imaging devices, milling machines, and sintering furnaces. In terms of revenue contribution, dental digital equipment has become Aidite’s second-largest business segment.

(Aidite’s related digital equipment; Image source: Prospectus)

Undoubtedly, Aidite has successfully extended its business from dental restorative materials to digital dental equipment, thereby identifying a second growth curve for corporate development.

As Aidite’s product portfolio continues to expand, the company has also established a solid foothold in overseas markets, with its products exported extensively to Europe, the United States, Japan, South Korea, and other regions. According to the prospectus, Aidite’s overseas sales revenue accounted for 44.49%, 57.61%, and 58.80% of its total principal business revenue in 2021, 2022, and 2023, respectively.

(Data source: Prospectus; Chart by VCBeat)

In specific regions,Aidite’s overseas sales are primarily concentrated in Europe and the United States., primarily because the denture consumer markets in Europe and the United States developed earlier, resulting in substantial local demand for dentures, particularly for zirconia ceramic blocks used in denture fabrication.

“Aidite has already established a strong industry position in the field of dental (restorative) materials and has an extensive global distribution network. Building on this foundation, it continues to independently develop or acquire other leading companies in dental materials and equipment. We believe that within the next five years, Aidite has the opportunity to become one of the top 15 global dental device companies,” said Wang Jianfei, Managing Director at Legend Capital.

Driven by continuous innovation in its two core business segments—dental restorative materials and digital dental equipment—Aidite has successfully completed its initial public offering (IPO) today, capping its 17-year entrepreneurial journey.

Listing is merely the starting point, not the endpoint. Therefore,For the secondary market, whether an innovative enterprise possesses sustainable growth potential is of paramount importance.

Looking at the development of the medical industry, innovative enterprises' insight into and grasp of market demand is the key to whether they can quickly open up greater growth space. In this regard, Aidite isGradually shifting from providing products to offering comprehensive solutions.

For instance, to meet the demand of oral healthcare service institutions for cost reduction and efficiency improvement, AiditeLaunched a chairside digital restoration system.

Specifically, Aidite leverages computer-aided design (CAD) and computer numerical control (CNC) machining technologies to assist dental medical service institutions in completing the design and fabrication of products such as dentures within clinical digital laboratories or at the chairside.

According to the prospectus, the chairside digital restoration system encompasses Aidite’s full range of dental digital equipment, dental restorative materials, and supporting clinical training. This system controls the precision of the entire denture fabrication process at the micron level and, by leveraging the biomimetic and gradient high-aesthetic advantages of the company’s dental restorative materials, provides comprehensive product and service solutions that effectively enhance patient visit efficiency and experience.

(Flowchart of Chairside Digital Processing Source: Prospectus)

From a commercial implementation perspective, Aidite is better positioned to serve both laboratory and clinical customers by integrating its equipment products with dental restorative materials or through adaptive integration of its equipment product lines.

Financial data can reflect true operational performance. The prospectus mentions that from 2021 to 2023, Aidite’s dental digital equipment rapidly scaled up by tapping into the equipment needs of its existing dental material customers, with sales revenue growing from RMB 93 million in 2020 to RMB 204 million in 2023, representing a compound annual growth rate (CAGR) of 30%.

Beyond tapping into existing business stock, seeking incremental business is also a crucial step for enterprises to achieve growth.To this end, Aidite continues to expand its industrial chain, explore more diversified approaches, and constantly enrich and refine its business layout.

For instance, Aidite independently designed high-precision, ultra-discreet printers dedicated to clear aligner therapy, and applied specialized polymer materials with superior elasticity, long-term stress retention, tear resistance, and stain resistance to its clear aligner products.

In addition, since 2023, Aidite has continuously pursued external business expansion through mergers and acquisitions.Has entered the fields of dental implant materials and upstream zirconia powder.

On January 30, 2024, Aidite signed a Share Purchase Agreement with Straumann Holding AG, the former shareholder of Korea Voran, under which the company agreed to acquire its 33.50% stake in Korea Voran for USD 10.8553 million. Upon completion of this transaction, Aidite’s total shareholding in Korea Voran reached 67.87%. As an implant supplier, Korea Voran’s products have obtained registration certificates in multiple regions, including FDA, CE, CFDA, and KFDA. By becoming the controlling shareholder of Korea Voran, Aidite has taken a critical step forward in expanding its business scope and international industrial layout.

As of now, Aidite has established a diversified dental ecosystem covering restorations, digital equipment, and industry chain empowerment.

(Image source: Prospectus)

Certainly, as an innovative enterprise, placing a high priority on technological research and development is also extremely important. According to the prospectus, Aidite’s total R&D expenses in 2021, 2022, and 2023 were RMB 20.7021 million, RMB 27.8979 million, and RMB 40.0671 million, respectively. The compound annual growth rate (CAGR) of R&D investment over the past three years was 39.12%, with cumulative R&D spending amounting to approximately RMB 89 million. This demonstrates that Aidite has been consistently increasing its investment in R&D.

As of December 31, 2023, Aidite and its subsidiaries had obtained a total of 93 patents. The company is a National High-Tech Enterprise, was shortlisted for KPMG China’s “Top 50 Biotech Innovation Enterprises 2022,” and was consecutively included in the “Future Healthcare 100 – China Digital Healthcare List” in both 2021 and 2022.

The prerequisite for any diversified expansion is the continuous deepening of core business operations.In this regard, Aidite stated in its prospectus that the funds raised will be used for the Aidite Dental Industrial Park – Oral CAD/CAM Materials Industrialization Project, the Digital Oral Comprehensive Service Platform Project, and the Aidite Dental Industrial Park – R&D Pilot Base Project, with construction periods of 2 years, 3 years, and 4 years, respectively; the remaining funds will be used to supplement working capital.

Regarding its global expansion, Aidite stated that this listing will further enhance the international influence of its brand and attract more high-quality customers, thereby accelerating the overseas expansion of China’s homegrown dental brands.

In the view of Wang Haihua, Investment Director at Legend Capital,Following its successful listing, Aidite’s brand image and market influence continue to expand, enabling the company to retain, attract, and motivate more talent., the Company's key account strategy, high gross margin strategy, and overseas expansion strategy will be further accelerated.

In recent years, the dental industry has faced significant challenges, a reality deeply felt by every participant in the field. In this regard, VCBeat previously explored the current situation in its article “Growth Rate Halved! Is the Dental Industry Bidding Farewell to the Era of High Growth?”

Despite ongoing challenges, the upward trend in the dental industry remains unchanged, with ample opportunities still available.

On the one hand, the state is placing increasing emphasis on oral health, and in recent years, China has introduced a series of policies and plans to promote the orderly and upward development of the oral healthcare industry.

For example, the National Health Commission outlined specific objectives in its issued and implemented “Healthy Oral Cavity Action Plan (2019–2025)”: By 2025, a supportive social environment for oral health will be fundamentally established; the level of oral health literacy and the rate of healthy behavior adoption among the population will increase significantly; oral health services will cover the entire population across the full life cycle, thereby better meeting the public’s health needs. Meanwhile, targeted actions to optimize oral health management for the elderly have been proposed, explicitly calling for the expansion and strengthening of services such as denture restoration.

On the other hand, China's oral care industry is still far from reaching its growth ceiling, with immense potential for the future.

According to data from Frost & Sullivan and Zhongtai Securities Research Institute, the market size of China’s oral healthcare industry is projected to grow from RMB 122.9 billion in 2018 to RMB 242.9 billion in 2028, representing a compound annual growth rate (CAGR) of 7.1%. This expansion is driven by both an increase in the number of patients and a rise in per capita spending on oral healthcare, resulting in concurrent growth in volume and price. The Chinese oral healthcare market is expected to maintain significant growth potential in the coming years.

(Image source: Prospectus)

Therefore, participants in the oral care industry must remain committed to long-termism. Meanwhile, VCBeat identifies four key points that warrant attention.

First, always be customer-centric.Whether in the dental industry or other sectors, the market and customer demands are constantly evolving. Innovative enterprises must avoid complacency; instead, they should strive to build their strategies on continuously improving operational efficiency and responding to customer needs. The underlying logic behind Aidite’s expansion from dental restorations to dental instruments, and its transition from providing products to offering comprehensive solutions, is its unwavering customer-centric approach.

Second, strengthen convictions and have the courage to continuously innovateNew, Embark on the Path of Developing New Quality Productive Forces.This is because innovation has always been the most powerful source of drive for upstream companies in the dental industry. Over the past two decades, the reason why China’s dental industry has seen the continuous emergence of innovative enterprises in niche sectors such as dental restorative materials, clear aligner orthodontics, CBCT, dental implants, 3D printing, and AI lies largely in these companies’ willingness to invest in R&D and their commitment to continuous improvement.

Third, join hands with patient capital.Since the beginning of this year, the Chinese government has repeatedly emphasized the active development of venture capital and the expansion of patient capital to promote the growth of the technology industry. For innovative enterprises, aligning with patient capital during their development journey can provide significant support. Take Aidite as an example. As its early-stage institutional investor, Legend Capital has patiently accompanied Aidite throughout its growth, offering crucial assistance. For instance, in terms of corporate strategy, Legend Capital and Aidite held multiple strategic discussions, providing important support for the company’s development. “In 2020, we jointly established a key strategy prioritizing overseas markets and aiming to become the global leader in zirconia products,” said an investor from Legend Capital.

Fourth, the vast market holds great promise.Currently, the wave of global expansion is surging, with Chinese innovative enterprises extending their reach from China to the global stage, thereby further expanding market opportunities. Seizing this trend of internationalization will represent a significant opportunity for Chinese dental companies in the considerable future.

Furthermore, in pursuing global expansion, Chinese dental brands enjoy the advantage of high cost-performance ratios—their products are priced relatively lower than those of international brands, yet their quality and performance are no less competitive, thereby granting Chinese dental enterprises strong competitiveness in the international market.

According to VCBeat,In the midst of international competition, China has seen the emergence of a host of outstanding innovative dental brands, including Aidite, Angelalign, Modern Dental, Smartee, Fussen Technology, Upcera, Woodpecker, MicroCloud AI, Ruisheng, Huge, and DeepCare.

Of course, in addition to the aforementioned companies, numerous emerging dental enterprises operating under the radar are also coming to the fore. Moving forward, driven by R&D and bolstered by patient capital, these companies are poised to take up the mantle, joining the major wave of global expansion and participating in international competition.

In this process, the history of innovation in China’s oral care industry is bound to open a magnificent new chapter.