“Drone chain” begins wave of listings
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In 2012, DJI launched the world’s first integrated aerial photography drone, the “DJI Phantom 1,” which ignited the consumer drone market.
Over a decade later, companies in the drone industry chain are gradually growing stronger and heading towards public listings.
Recently, Shenzhen Hollywin Technology Co., Ltd. (hereinafter “Hollywin Technology”) had its Sci-Tech Innovation Board IPO application accepted by the Shanghai Stock Exchange.
Hollywin Technology’s core product is the drone power system, which provides an important boost for drone flight.
From 2022 to 2024, Hollywin Technology’s revenues were RMB 468 million, RMB 546 million, and RMB 738 million, with net profits attributable to the parent company during the same periods of RMB 82 million, RMB 94 million, and RMB 152 million.
Although DJI dominates the drone market, as more players join the industry, companies may source power systems from third-party suppliers for reasons of cost and time efficiency. This is a key area of growth potential for Hollywin Technology’s future performance.
For this IPO, Hollywin Technology plans to raise RMB 1.96 billion to invest in projects such as the “High-End Power System Smart Industrial Park (Phase I)” and “R&D Center Upgrade Construction.”
This is only a snapshot of the wave of IPOs among drone industry chain companies. According to incomplete statistics from Xin Feng, this year alone, Hollywin Technology, Sunray Intelligent, and XAG have begun their IPO journeys, while Tengdun Technology has started IPO counseling.
Companies in China’s drone industry chain are ushering in a critical moment of accelerated access to capital.
Gross Margins Comparable to Apple
Hollywin Technology focuses on drone power systems, which are one of the core components of drones, accounting for 10%–15% of the total manufacturing cost.
Thanks to the strong performance of the low-altitude economy, Hollywin’s drone power system revenue soared from RMB 177 million in 2022 to RMB 425 million in 2024, an increase of nearly 1.5 times during this period.
Hollywin’s product gross margin is quite impressive.
In 2024, Hollywin’s overall gross margin reached 47.31%, up 1.54 percentage points year-on-year.
Such a gross margin is rare in the hardware field. For example, Apple’s gross margin is about 45%, while United Power (301656.SZ), the electric motor supplier for carmakers such as Xiaomi SU7, only had a gross margin of 16.57% in 2024.
This is partly due to Hollywin’s own strengths—it possesses full-stack drone power system technology and can self-develop and manufacture key components such as electronic speed controllers and motors, making costs relatively controllable.
But more crucially, competition in the industry is currently relatively limited.
At present, the drone industry is basically a DJI monopoly, as DJI follows a self-developed path.
“Because DJI started developing drones relatively early, the domestic supply chain was not yet complete, so DJI had to adopt a self-developed approach,” said a Shenzhen-based professional familiar with the drone industry. “Furthermore, the sales volumes of new entrants are still relatively small, so the cost pressure from self-made power systems is amplified.”
As a result, for latecomers wanting to quickly enter the drone market, the most efficient way is to procure power systems from third-party suppliers like Hollywin Technology.
Besides DJI, several companies in the industry, such as JFPoly and CHCNAV, all choose to externally procure drone power systems to shorten R&D cycles and control costs.
For example, JIMO Robotics launched the world’s first fully-perceiving intelligent agricultural drone within just two years of being founded, with Hollywin Technology as its supplier.
In the first half of 2025, JIMO Robotics’ purchase of drone power systems from Hollywin contributed RMB 26.33 million in revenue.
Even though Hollywin boasts gross margins comparable to Apple, there is still a gap compared to its peers.
As a competitor, Sunray Intelligent’s 2024 gross margin reached 59.76%, more than 10 percentage points higher than Hollywin’s.
The key difference is the markets they target.
Overseas markets are vital for Sunray Intelligent, accounting for half of its income. In 2024, Europe, North America, and other overseas regions brought in a total of RMB 426 million, or 51.38% of its revenue.
By contrast, Hollywin’s overseas revenue was only RMB 186 million, about a quarter of its total.
This is a result of Hollywin’s relatively weak brand influence overseas. For example, the unit export price for ESC products purchased by Sunray from Hollywin and sold externally can reach RMB 492.58, 2.4 times the procurement price.
“Sunray Intelligent focuses on overseas markets, and its revenue comes mainly from overseas clients. Its product pricing strategy is heavily influenced by overseas markets, and its product sales prices are significantly higher than ours,” Hollywin noted. “For example, during the reporting period, Sunray’s outward sales price for ESC products (mainly sourced from Hollywin) was much higher than its procurement price.”
Hollywin plans to strengthen brand-building of its drone power systems in overseas markets to capture more opportunities.
At present, Hollywin has added advertising positions on platforms such as Alibaba, Google, Facebook, LinkedIn, and RCFans, further increasing sales expenses. In the first half of 2025, sales expenses reached RMB 21.24 million, already surpassing the full-year figure for 2023.
Risk of Substitution Ahead
Breaking it down, core components of drone power systems include electronic speed controllers (ESCs), motors, and propellers.
Hollywin currently sells both integrated drone power systems and single core components externally.
However, integrated drone power systems have higher value, with an average selling price in 2024 of RMB 661.79, while during the same period the price for single items such as ESCs and motors remained around RMB 100.
The two categories contributed about equally to Hollywin’s total revenue. In 2024, integrated power systems and component singles each generated about RMB 208 million and RMB 209 million, respectively.
But the business of single-core components is facing the risk of substitution.
Sunray Intelligent’s ESC, propeller, and other products are largely contract-manufactured by Hollywin.
From 2022 to 2024, Sunray contributed RMB 18.73 million, RMB 42.63 million, and RMB 30.93 million in revenue for Hollywin, ranking among its top five customers each year.
Sunray, for its part, revealed it already has the technical ability and the necessary equipment to fully self-produce ESCs and propellers, and is preparing to gradually shift to self-production.
As production capacity ramps up, Sunray’s product gross margin has already overtaken that of externally sourced components.
In the first half of 2025, Sunray’s self-produced propellers had a gross margin of 63.12%, over 6 percentage points higher than with external sourcing.
To boost single-component sales, Hollywin has launched a price war and focused on lower-end products.
In the first half of 2025, the selling prices for ESCs and propellers were RMB 133.79 and RMB 102.84, both down more than 10% year-on-year.
Overall, Hollywin is facing a risk of substitution.
Although many new players will choose to purchase power systems from third-party suppliers, leading drone manufacturers still prefer the self-developed route.
The most typical example is DJI.
In 2024, DJI’s market share in drone power systems reached 43.2%, nearly 40 percentage points higher than third-placed Hollywin; XAG, an agricultural drone company currently striving for a Hong Kong IPO, regards the power system as a key module and chooses to self-design and produce it.
“XAG insists on a fully self-developed strategy—motors, flight controllers, radars, airframe structures, and other core components are all independently designed, with a high rate of domestic chip use, which allows effective cost control and improved product competitiveness through self-development and self-production,” said Peng Bin, founder of XAG.
Hollywin’s opportunity lies in whether the industry can achieve significant expansion.
The number of companies with drone operation certificates is still only slowly increasing. As of the end of 2024, nearly 20,000 companies in China had obtained such certificates, an increase of 154 over the previous year.
Whether more players will enter the drone industry and whether mid-and-lower-tier manufacturers can capture market share from leading companies is key to whether Hollywin can unlock more upside in its future performance.
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