Focus on the Printing Supplies Market: Drum Industry to Exceed $10 Billion

In the era of IoT and intelligent development, despite the trend towards paperless offices, global printing demand has not decreased over the past decade but continues to grow. As the domestic market matures, outdated production capacities and enterprises are being phased out, while technology leaders such as Hengjiu Technology (002808) and Dinglong Co., Ltd. are gaining prominence, driving industry consolidation.

Printing Industry Profits Rely on Supplies, with Drums at the Core

The printer industry is highly monopolized, with only a few global players and significant technical patent barriers, making it a highly profitable sector. In China, the printer market is fiercely competitive, dominated by four multinational giants. However, the industry's business model relies not on printer sales but on the continuous revenue from consumables.

According to statistics, the domestic printing consumables market has an annual output value exceeding RMB 20 billion and is growing rapidly. From the perspective of the laser printing consumables industry chain, midstream consumables have become the primary profit source for both OEM and compatible consumables manufacturers. Key components such as toner, chips, and developer rollers are sold to end customers through drums, making drums a critical market for consumables manufacturers.

The drum market is divided into OEM and aftermarket segments. Guojin Securities research indicates that China's drum market accounts for over 30% of the global market, with the global drum market expected to exceed 30billion this year and the domestic market surpassing10 billion. Although the overall drum market growth has slowed, the substitution effect of compatible drums for OEM drums remains significant, with a compound annual growth rate (CAGR) of around 9% from 2014 to 2018. Currently, compatible drums hold less than 30% of the domestic market share, but this is expected to grow as compatible drum manufacturers improve quality and offer competitive pricing, with a projected CAGR of 10% over the next five years.

Industry Chain Collaboration: Technology Leaders Prevail

Laser OPC drums, a type of drum, are core components of laser printing devices, involving advanced technologies such as new materials, optoelectronics, system integration, and precision manufacturing. In the OEM market, a few Japanese and German companies dominate, while in the aftermarket, competition is intensifying as domestic manufacturers improve their capabilities and new players enter the market. Hengjiu Technology (002808) is one of the few domestic manufacturers with an annual production capacity exceeding 10 million laser OPC drums.

According to public data, Hengjiu Technology (002808) has successfully developed high-precision laser OPC drums for color laser printers, filling a technological gap in China and becoming one of the few global companies with complete core technology and system integration capabilities. The company has built 10 highly automated production lines, achieving full localization and industrialization of laser OPC drum manufacturing, with an annual capacity of 63 million units, making it the world's second-largest OPC drum manufacturer after Canon. Additionally, Hengjiu Technology has participated in the formulation of multiple national and industry standards.

Dr. Yu Rongqing, Chairman of Hengjiu Technology, stated that the print quality of the company's laser OPC drums has reached or approached that of imported products, achieving import substitution in some domestic markets. Its products are widely used in laser printers from renowned brands such as HP, Samsung, Canon, and Epson.

Full Industry Chain Layout Enhances Competitiveness

The printing consumables industry is a closely collaborative industrial cluster with a highly efficient circular economy. Hengjiu Technology (002808) focuses on laser OPC drums as its core business, integrating industrial resources and deepening strategic cooperation with companies in toner and drum manufacturing to achieve resource complementarity and synergistic development.

Furthermore, companies like Dinglong Co., Ltd. have established full industry chain layouts. Dinglong has built a comprehensive product system centered on color polymer toner, supported by recycled drums, carriers, developer rollers, charge control agents, and cloud printing services, driving the industry towards a full industry chain model.

As competition in the domestic drum industry intensifies and outdated capacities are phased out, market concentration will gradually increase, providing significant growth opportunities for technology-leading enterprises.