Dental Digitalization | "Conceptual Dividend" to the Left, "Industry-University-Research" to the Rig

The trend of digitalization in dentistry has actually been going on for a long time.

Is digitalization the future? Everyone knows it is.

Who is reaping the benefits of the "digitalization" concept?

Who truly creates the future single-handedly?

The entire industry is actually waiting and watching.

Today we are studying a company listed on the National Equities Exchange and Quotations (NEEQ):

Shining 3D

• Shining 3D: The brand belongs to Shining 3D Technology Co., Ltd., which was established in December 2004 and listed on the National Equities Exchange and Quotations (NEEQ) in August 2014 (stock code: 830978). It is a technology innovation enterprise with a complete integrated software and hardware technology chain that it independently develops, from 3D digital data design to 3D printing direct manufacturing. Headquartered in Hangzhou, it has overseas subsidiaries in Germany and the United States.

Shining 3D collaborates with West China School of Stomatology, Sichuan University | Image source: Shining 3D official WeChat account

On April 22 this year, Shining 3D signed a "Cooperation Agreement on the Transformation of Clinical Scientific Research Achievements of Professor Yu Haiyang's Team" with West China School of Stomatology, Sichuan University, to conduct in-depth cooperation on the transformation of research results on oral restoration space and precision measurement.

Shining 3D is headquartered in Hangzhou, and has also established a second R&D center in Chengdu, a leading center for dental research. Its partners include research institutions such as Sichuan University and the University of Electronic Science and Technology of China. Prior to its significant investment in Chengdu, Shining 3D had already collaborated with Professor Sun Yuchun of Peking University School of Stomatology on research into digital dental equipment, particularly improving the accuracy of intraoral scanning, and this collaboration is currently in the productization stage.

Shining 3D participates in TCT Asia 2021 | Image source: Nanjixiong 3D Printing

Transformation of scientific research results

If it's not simply about buying patents, then it requires advance planning.

What gives Shining 3D its confidence?

Let's start today

The Legend of Shining 3D's "Turbulent Thirty Years" Begins

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Genes that cannot be ignored

The meeting of two generations of entrepreneurial spirit

The prequel to Shining 3D is a story of two generations of entrepreneurs meeting in the same era: Shining 3D founder Li Cheng, born in 1962, started his business in the chemical fiber and textile industry. In 1983, Li Cheng entered the textile industry, and after ten years of hard work, he founded his first company, named "Yongsheng" (listed on the Hong Kong Stock Exchange in 2013, stock code: 03608). Since then, around Yongsheng, Li Cheng has gradually built his own chemical fiber and textile empire.

Private entrepreneurs born in the 1960s were among the first wave of trendsetters in the Chinese market, and they often embodied some common characteristics of the era: recognizing opportunities, constantly seeking solutions, and being pragmatic and hardworking. These qualities are known to later generations as the "spirit of the old entrepreneurs."

When Yong Sheng was seeking high-tech investment opportunities, Li Cheng was fortunate to have Li Tao, the right-hand man of "Xianlin 3D".

In the summer of 2002, Li Tao, a recent graduate of Zhejiang University, abandoned the "booming" financial industry and instead took a different path, joining Yong Sheng. Over the next two years, Li Tao served as Yong Sheng's office director and president assistant.

At that time, the two may not have known that this would also be the meeting of two generations of entrepreneurs.

Shining 3D CEO Li Tao | Image source: Publicly available information

In December 2004, Li Cheng, already in his forties, founded Shining 3D. At that time, 24-year-old Li Tao, as a "founding member," also joined the new company and was entrusted with important responsibilities.

During Li Tao's years at the helm, Shining 3D's "young and vigorous" character became apparent: listing on the New Third Board, venturing into 3D printing technology, initiating R&D projects for dental digital products, promoting the market penetration of dental model 3D scanners, expanding into overseas markets, and participating in the formulation of industry and national standards... Li Tao himself has also been promoted to Vice Chairman of the China 3D Printing Technology Industry Alliance, member of the Xiaoshan District Political Consultative Conference, outstanding small and medium-sized entrepreneur of Hangzhou, and recipient of the Zhejiang Provincial Science and Technology Little Giant Award...

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Precocious Three-Dimensional Intelligence

Benefits of consuming "good products"

When Shining 3D was first established, it only had one product: a 3D camera. However, the market response was extremely encouraging: "Sales profit was nearly 80%" (data from Hangzhou Daily). It must be said that, unlike today's crazy marketing era, it was truly an era where product was king. The early-thinking Shining 3D gained a foothold in the market by virtue of its product strength.

Following this, Shining 3D developed 3D scanners based on its 3D digitization technology, expanding its 3D printing business. While the 3D printing technology we see everywhere today was gaining momentum overseas at the time, the domestic market was actually quite calm.

3D printing technology, actually the common name for Additive Manufacturing (AM), is considered a landmark technology of Industry 4.0.

For an entrepreneur, information asymmetry may be an opportunity presented by the times; but being able to seize information asymmetry and get a head start is a sign of an entrepreneur's precocious understanding of information asymmetry.

With the successive introduction of relevant national incentive policies, 3D printing has been thrust into the spotlight. Shining 3D has also secured four rounds of financing and listed on the National Equities Exchange and Quotations (NEEQ) in August 2014, raising hundreds of millions of yuan through several private placements. At that time, there were virtually no dental companies listed on the NEEQ in China.

Shining 3D has also begun to step into the public eye in a more open and transparent manner. The key figures extracted Shining 3D's R&D expenditures from its financial reports between 2015 and 2020.

Image source: Good Teeth Drawing

According to publicly disclosed information, Shining 3D's cumulative R&D expenditure has exceeded 500 million yuan since 2015. 2018 saw a historical peak, with R&D expenditure accounting for 34.2% of operating revenue, meaning that more than one-third of the revenue in that period was invested in R&D projects.

In a booming industry, competition is naturally fierce. However, compared to its peers at the time, most maintained R&D investment at around 10% of revenue. Even in 2020, amid the pandemic, Shining 3D still invested over 20% of its revenue in R&D. In its latest Q1 2021 financial report, Shining 3D's Q1 R&D expenses exceeded 25 million yuan, continuing its "excellent tradition" of allocating over 20% of revenue to R&D.

Image source: Compiled from publicly available information.

In addition, R&D personnel once accounted for more than 40% of Shining 3D's employees. In the past two years, with the expansion of its business at home and abroad, the "logistics team" such as sales and management has expanded. Even so, the proportion of R&D personnel has not fallen below 30%, and in 2020, the proportion of R&D personnel with master's or doctoral degrees exceeded 50%.

It sounds easy, but research and development is often an exploration of the unknown, and the development cycle of many excellent products is surprisingly long. And by observing whether a company is willing to invest in R&D, one can assess whether the company truly commits to meeting needs across time horizons.

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Accumulate knowledge and experience before unleashing its full potential.

The development of digital dental services is rapid.

From high-precision 3D scanning to 3D printing technology, and then to a major foray into the digital dental field; it may seem like a bold move across disciplines, but it is actually rooted in years of accumulated experience – and at the same time, it is another new journey.

Since Shining 3D entered the dental digitalization business, it has also expanded rapidly in the international market, establishing overseas subsidiaries in Germany and the United States.

Shining 3D's Global Expansion | Image Source: Screenshot from Shining 3D's official website

Since establishing its German overseas subsidiary in 2017, Shining has begun disclosing domestic and international revenues separately, with the proportion of overseas revenue increasing year by year, reaching a near 50/50 split by 2020. The latest 2020 annual report, for the first time, provides a detailed breakdown of dental digitalization revenue over the past three years, showing a compound annual growth rate of 46%. As of 2020, dental digitalization revenue accounted for nearly 40% of total revenue.

In its Q1 2021 financial report, Shining 3D achieved an overall sales growth of 61.48%, with the main driver of its outstanding performance being its core business of dental digitization and professional 3D scanning, which grew by 73.14% year-on-year.

Image source: Good Teeth Drawing

Judging from the data alone, Shining 3D has achieved remarkable success in its overseas expansion, with its dental business developing rapidly. It is understood that Shining 3D's digital dental products are currently sold globally, with overseas distributors in dozens of countries and regions, and its international expansion team now comprises over 50 people.

Beyond talent, Shining 3D has seen its patent portfolio grow several times over in six years. As of December 31, 2020, it held 380 patents, including 105 invention patents. Therefore, as mentioned above, "R&D is an exploration of the unknown," and fortunately, Shining 3D has achieved considerable success.

Image source: Good Teeth Drawing

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Shining 3D version 3.0:

Making a major foray into dental digitalization and focusing on industry-academia-research collaboration

Indeed, the COVID-19 pandemic has had a significant impact on many industries, including dentistry. However, as the old saying goes, "misfortune may be a blessing in disguise, and a blessing may be a misfortune in disguise." Through continuous industry observation, those with foresight have already accelerated the pace of digital transformation.

Shining 3D also demonstrated keen market insight, launching its clinically-oriented product series, including Aoralscan and AccuFab. It is reported that Shining 3D shipped over a thousand intraoral scanners in 2020. Five years prior, Shining 3D's dental model scanners had already penetrated various dental prosthesis workbenches throughout China...

3D Digital Solutions

Digital applications in dentistry

Shining 3D Product Matrix | Image source: Screenshot from Shining 3D official website

Today, it's difficult to define "product" simply as a physical object. Services, data, and relationships have all become part of a company's comprehensive product offerings.

Beyond hardware, in the lead-up to the South China exhibition in May this year, Shining 3D held a private event specifically for DSO clinics and processing plants, where the word "connection" frequently appeared. This reflects Shining 3D's combined product offerings and demonstrates its years of experience and strength.

"Digital dental products, whether hardware or software; patients, doctors, and technicians during the treatment process; none of them should be isolated islands. Connectivity is something digital vendors must do. Whether it's the orthodontic module in an intraoral scanning system, oral health examination reports, online electronic orders that replace paper forms, or one-click direct connection between intraoral scanners and 3D printers, all of them embody the meaning and value of connectivity." — Shining 3D

Speaking of accumulated experience, Shining 3D, which started with 3D technology, has also participated in the formulation of national standards in the dental field. This national standard, "Technical Requirements for 3D Scanners of Dental and Jaw Models," will be implemented on October 1st this year.

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Caption: Upcoming national standard: Technical Requirements for 3D Scanners of Dental and Jaw Models

As a crucial component of dental digitalization, 3D printing is increasingly being used in the dental industry. However, for a considerable period, from industrial-grade 3D printing to chairside 3D printing, while this technology has become increasingly integrated into the dental field, the standards that are compatible with it are still under exploration and gradual improvement.

The soon-to-be-implemented "Technical Requirements for 3D Scanners of Dental and Jaw Models" is not a mandatory national standard, but as a recommended national standard, it is currently the only published and soon-to-be-implemented national standard related to 3D scanner technology in the dental field.

So, from expanding into overseas markets to collaborating with domestic industry, academia, and research institutions; from refining the product matrix to formulating national standards... Shining 3D is gradually permeating every detail of the dental industry with its accumulated corporate resources.

#Postscript

Those who have dealt with Shining 3D will likely have noticed that its dental team today includes many young and middle-aged professionals. They uphold the company's R&D spirit and commitment to product quality, and compared to the previous generation, they possess a much more modern and innovative approach.

The digital dental field in China has gradually entered a more complex phase. Breakthroughs in technology, systems, and application scenarios are happening at an incredibly fast pace, and no one knows who will be the first to reach the top.

However, in the relay race between two generations of entrepreneurs, Shining 3D accumulated enough momentum to launch itself from the highest point when choosing its track, allowing it to start with accelerated speed. Looking back at Shining 3D's consistently high R&D investment over the years, this may gradually become a booster for Shining 3D in the field of dental digitalization.

In any case, in Shining 3D's brand story today, the entrepreneurial spirit of the younger generation and the older generation have finally come together again in this era. This is a source of joy and anticipation for our times.

Best wishes

Author: Yao Guang, Chi Mei Wang Liang

Planning: TING | Editing: Ayao

Legal Counsel: Ouyang | Proofreader: CC

Producer: YUE