2020.08.09 CoStone Capital Views:
August 7th, China’s securities regulator approved the IPO registration of Donglai Coating Technology Co., Ltd. It then will be listed on the Shanghai Stock Exchange's sci-tech innovation board, commonly known as the STAR market, adding a fifth STAR company to CoStone’s portfolio.
August 7th, China’s securities regulator approved the IPO registration of Donglai Coating Technology Co., Ltd. It then will be listed on the Shanghai Stock Exchange's sci-tech innovation board, commonly known as the STAR market, adding a fifth STAR company to CoStone’s portfolio.
The Company, founded in 2005, provides high-tech and high value-added paints out of advanced petrochemicals, including car refinish paint, fluorocarbon protective paint, interior & exterior parts paints, 3C advanced paints. The company helps customers to find befitting color formula as well.
As an industrial leader, Donglai ranks Top 3 in the 2019 Chinese Patent Statistical Analysis Annual Report of Automotive Coatings at the annual meeting of the China National Coatings Industry Association. Donglai is also the only Chinese brand among the top 5 companies.
Donglai’s giant competitors like Pompeii, Ashmore, AkzoNobel, BASF, are also solid evidence of its industrial status.
Donglai is the only Chinese brand among the 11 top producers in the Chinese market of car refinish paint that has been certified as original product manufacturers or a qualified automotive OEM supplier.
Donglai’s brands: onwings®, onwaves®, Fixs® are registered and protected in over 80 countries globally. Over 20 car brands including FAW-Volkswagen, FAW-Audi, Dongfeng Nissan, Changan Ford, SAIC-GM, Volvo, Lincoln China, Infiniti have granted Donglai the status of Tier 1 Supplier, the best form of cooperation in the industry.
Donglai, after 20-year growth, is one of the rarest Chinese brands with over 20 OEM certifications, a must for qualified refinish paint market players. Donglai’s status is hard to win for the high entering barrier which can only be stepped over by long-term and high standard investment in R&D, production management, service systems.
For years in China’s market, Donglai embraces a natural advantage in decision-making, follow-up R&D, relationship with clients.
Car Brands granting Donglai’s car refinish paints with C/O or admitting Donglai as a qualified automotive OEM supplier.
Car brands acknowledging Donglai’s design of interior & exterior parts paints, certifying Donglai’s products as C/O and admitting Donglai’s mass production performance
Research and Market has reported that China occupies a great share of the 147.2 billion USD international paint market with about 40 billion USD. However, the consumption side of China pales in comparison with the developed Europe and North America. At 28.37 USD consumption of paints per capita, China sees a huge market potential and a sound momentum.
Started in 2017, CoStone holds 6.2% Donglai pre-issuing shares.
CoStone believes that as a match of international giants, Donglai will one day become a match of international giants or even replace them in China’s market.
Rewritten by Chen Cong, Edited by Li Yunzhen, Du Zhixin
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026