Another big seller is coming!

There are still many companies in the export industry that are about to go public.

When it comes to tools, I believe many cross-border sellers will first think of the listed giant Superstar Technology. In fact, there is another export giant in the tool field that is about to go public. It is worth noting that its brand has won the Amazon Best Seller.

Zhejiang's best seller is about to go public, with annual sales of 7 billion in 2022

As one of the most commonly used tools, power tools can be found everywhere, such as electric drills, electric saws, cutters, lawn mowers, etc. The use of power tools can greatly improve work efficiency, so they are widely used in construction engineering, house decoration, automobile manufacturing, aerospace, gardening and other industries. They are important equipment for daily production and life, and play an indispensable role in social and economic development.

China is the world's main supplier of power tools. In the past 15 years, the annual output of portable power tools in China has remained above 200 million units. Since the power tool industry accounts for a large share of exports and cargo transportation relies on shipping, the production areas are mainly concentrated in coastal cities such as Zhejiang Province, Jiangsu Province and Guangdong Province . These provinces and cities have also produced many tool sellers, and Zhejiang Pulai Electric Co., Ltd. is one of the best.

Since its establishment in 2005 , Pride has been engaged in the research and development, design, production and sales of power tools. After years of technical accumulation and development, its products have covered six major product series, including electric heating, spraying, nail guns, blowing and suction, grinding, and steam, with more than 300 specifications and models , which are widely used in home decoration, industrial manufacturing, construction, garden maintenance and other fields. Now, Pride's five-step listing process only has the last step left.

Pride is also a national high-tech enterprise and a specialized and innovative "little giant" enterprise . As of February 28, 2023, the company has obtained 437 domestic and foreign patents, including 32 invention patents, 205 utility model patents, and 200 design patents.

Benefiting from the continuous development of the industry and the strengthening of competitive advantages, Pride's operating income continued to grow . In 2020, 2021 and 2022, the operating income was RMB 391.809 million, RMB 672.7852 million and RMB 703.6387 million respectively , with an annual compound growth rate of 34.01% . With the expansion of business scale, net profit increased from RMB 68.7612 million in 2020 to RMB 99.1601 million in 2022, with an annual compound growth rate of 20.09%.

Pride's domestic and foreign sales have maintained sustained growth. Among them, the foreign markets are mainly concentrated in Europe, America and Asia-Pacific, mainly exported to the United States, the Netherlands, Germany, France, Russia, Canada, Australia, Japan, etc.; the domestic market is mainly concentrated in East China, South China and other regions. From 2020 to 2022, the export revenue will be RMB 212.3978 million, RMB 410.1115 million and RMB 418.2023 million respectively, accounting for 54.61%, 61.46% and 60.05% of the main business income in the current period respectively.

In terms of sales model, Pride adopts the "ODM+OBM" business dual-driven model.

On the one hand, we cooperate with world-renowned brands and retailers such as Stanley Black&Decker, BOSCH, Makita, Metabo, etc. to continuously develop our ODM business . On the other hand, we are also promoting our own brands and selling them in domestic and foreign markets with our own brands. Currently, we have our own and authorized brands such as "Hengdong", "NEUMASTER", "PRULDE", "Bonta", and "BATAVIA".

It is worth noting that Pride has taken advantage of the rise of e-commerce platforms in the field of power tools and opened brand flagship stores on online platforms such as Amazon and Tmall. It has now covered markets such as China, North America and Europe . The amount and proportion of sales in cooperation with major third-party platforms are as follows:

From 2020 to 2022, Pride's OBM business achieved sales revenue of RMB 36,628,700, RMB 60,643,600 and RMB 89,105,700, accounting for 9.42%, 9.09% and 12.80% of the main business revenue, respectively. Sales of its own brands continued to grow rapidly. Among them, the Amazon platform is the main source of revenue, with revenue exceeding 80 million in 2022. Its tool brand NEU MASTER successfully won the Amazon Best Seller.

Let's take a look at the revenue of Pride's six major product categories:

As can be seen from the figure, electric heating and spraying products account for the highest share of revenue, both exceeding 2.5 billion.

Overview of the development of the power tool industry

With the increase in power tool application scenarios and the popularization of market acceptance, the global power tool industry has shown an upward trend year by year. In 2021, the global power tool market size was US$34.3 billion, and it is expected to continue to grow steadily at an average annual compound growth rate of 5.7% in the future, and reach a market size of about US$45.2 billion in 2026.

By region, North America is currently the main sales market, followed by Europe and Asia Pacific , with market sizes accounting for 38.65%, 32.39% and 19.87% of the world respectively, totaling more than 90% of the total. At present, the market size of developing countries accounts for a small proportion of the global power tool market, but developing countries such as China and India have a high growth rate. With the continuous expansion of the application areas of power tools in new developing countries and the continuous upgrading of consumption structure, the global power tool market size is still expected to accelerate.

In terms of export regions, North America, Europe and Asia are currently China's main export regions. In 2021, China's export value of portable power tools to Europe, North America and Asia was US$4.76 billion, US$4.115 billion and US$2.137 billion, respectively, accounting for 37.59%, 32.50% and 33.7% of the total export proportion, respectively.

16.88%, and the three regions together account for nearly 90% of the total.

These countries and regions have high requirements for the safety and environmental protection of electric products, and have set up multiple certification standards for market access. The safety standards include GS certification, EU CE certification and EMC certification, US UL certification and ETL certification, Japan PSE certification, South Korea KC certification, etc. Environmental protection certifications include ROHS, PAHs, REACH certification, etc.

This also shows that the industry barriers of power tools are relatively high. In recent years, with the continuous development of lithium battery technology, the market for cordless power tools has developed rapidly. In 2019, the global market size of cordless power tools was US$16.851 billion, with an average annual compound growth rate of more than 6%, accounting for more than half of the global power tool market size. In the future, the global market share of cordless power tools is expected to increase further . At present, the proportion of domestic cordless power tools in the domestic market is still low, and there is huge room for future development.

In addition, the rechargeable batteries commonly used in power tools today include lead-acid batteries, nickel-metal hydride/nickel-cadmium batteries, and rechargeable lithium-ion batteries. Lead-acid batteries have gradually withdrawn from the portable power source market due to a series of issues such as size, life, safety, and energy density. Rechargeable lithium-ion batteries are one of the future development directions for large-capacity power sources .

In summary , the power tool industry is a technology-intensive and capital-intensive industry. Power tools have gradually achieved miniaturization, cordlessness and lithium battery based on safety and functionality. In the future, the product design of power tools will be more innovative, the safety performance will be more perfect, and new environmentally friendly materials and lithium battery technology will be continuously applied to achieve low-power, environmentally friendly, lightweight and portable products .

In the process of continuous self-updating and iteration in the industry, I believe that many domestic power tool companies will be able to keep up with the development trend of the times and even lead the development of the industry.