Hengsheng Group Enters Chinese Mask Market... "Expecting External Growth in Second Half"

[Asia Economy Reporter Yoo Hyun-seok] Chinese company Hengsheng Group announced on the 23rd that it will begin sales activities in earnest in the second half of the year to generate revenue, following the introduction of mask production facilities and completion of related certifications.

Hengsheng Group participated in the China Guangzhou Epidemic Prevention Supplies Expo for two days starting from the 10th, officially commencing sales and promotion activities. Since production conditions and related certifications have already been secured, once orders with distributors currently under negotiation are confirmed, revenue generation in the second half is expected to accelerate. The company explained that the gross profit margin of the mask business is about 35%, higher than that of existing businesses, which will also help improve profitability.

Hengsheng Group has completed production preparations for KN95, N95, medical masks, and general masks, as well as obtaining China GB2626-2006 certification and US FDA certification. This was the result of swiftly preparing by recruiting experts, introducing facilities, and applying for certifications to enter the mask market simultaneously with the widespread outbreak of the novel coronavirus infection. Hengsheng Group, whose main business is toy production and sales, intends to continue its growth momentum despite the stagnant business environment through business diversification.

The mask production facilities currently have eight production lines, with a production capacity exceeding 20 million units per month. With the FDA certification obtained in April, sales within China as well as exports to the United States are expected. CE certification is also scheduled to be acquired soon, enabling entry into the European market. According to a company official, “Based on the demand from clients currently under negotiation, the second half mask business revenue could reach a level comparable to that of the toy business,” adding, “Given these challenging times, the company will remain highly alert and respond swiftly to lead the market.”

Meanwhile, Hengsheng Group’s toy business performance was temporarily sluggish in the first half of the year, but it is expected to recover due to sales rebound following the normalization of the Chinese economy after the COVID-19 impact and increased orders for the Winter Olympics and Paralympics mascots in the second half.