【Non-ferrous - Jia Hongkun】Adit: Leading Dental Materials Enterprise, Domestic Substitution at the Right Time

(Source: Guotou Securities Research)

【Nonferrous Metals - Jia Hongkun】Adit: Leading Dental Materials Company, Domestic Substitution Is Timely

Report Release Date: March 19, 2026

■ Leading enterprise in oral restoration materials and digital equipment with stable profitability: The company specializes in oral restoration materials and digital equipment services. In 2023 and 2024, it expanded into zirconia powder and dental implant businesses through equity participation and acquisitions. Currently, its main products include oral restoration materials such as zirconia ceramic blocks and glass ceramics, as well as chairside digital equipment for oral digitalization. Oral restoration materials are the company’s primary revenue segment, with zirconia ceramic blocks being the core income source. In the first three quarters of 2025, the company achieved operating revenue of 747 million yuan, a year-on-year increase of 16.44%; net profit attributable to shareholders was 142 million yuan, up 27.2%. The company maintains a low debt ratio, with a slight increase in period expense ratio due to marketing demand in South Korea, and continues to sustain stable profitability.

■ Rising overseas yttria prices may accelerate domestic substitution of ceramic blocks: Since 2025, a new round of tariff disputes combined with the January 2026 upgrade of rare earth controls against Japan have led to continued tightening of domestic rare earth policies, driving significant increases in overseas yttria prices. As of March 2026, overseas yttria prices have surged over 45 times, with a price gap of up to 36 times between domestic and international markets. Yttria, as the key stabilizer for yttria-stabilized zirconia (Y-TZP) used in dental applications, is a core raw material for full-ceramic dental restorations. Currently, the global dental ceramic market is steadily expanding, but high-end dental zirconia markets are still dominated by overseas manufacturers. Given the large price gap, overseas zirconia powder producers face over 64% of costs from yttria, with rigid cost transmission and ongoing price increases, while domestic companies have yttria costs accounting for less than 7%, giving them a significant cost advantage. Since zirconia ceramic blocks account for a relatively low proportion of total denture costs and downstream demand is less price-sensitive, the company, as a leading domestic oral restoration material provider, secures raw material supply through equity stakes in upstream powder companies. Coupled with ongoing expansion of overseas channels and increasing export share, it is well-positioned to benefit from overseas price hikes and domestic market substitution dividends, opening up growth potential.

■ Digital oral health ecosystem formation and growth in 3D printing business: China’s oral digital market is rapidly expanding, with device penetration continuously increasing. As a leader in oral restoration materials and digital equipment, the company leverages chairside digital systems to connect clinical and laboratory ends, creating a new full-process delivery model. Denture design and processing can be completed within 180 minutes, greatly improving diagnostic and treatment efficiency. Meanwhile, the company’s 3D printing business has a solid foundation for large-scale promotion, with leading printing efficiency of core equipment and FDA-certified supporting materials. It is expected to develop a profitable “hardware subscription + consumables repurchase” model, creating a new core growth engine and enhancing profitability.

■ Risk warnings: Policy and regulatory risks, significant raw material price fluctuations, lower-than-expected demand for oral restoration materials and digital equipment, and deviations in profit forecasts and assumptions.