Analysis of Patent Barriers for Regenerated Fabric Technology of Fuerun Co., Ltd.

Based on the information I collected, the following is a detailed analysis of the patent barriers for regenerated fabric technology of Fuerun Co., Ltd.

Fuerun Co., Ltd. (Hangzhou Fuerun Co., Ltd.), as a leading domestic enterprise in recycled fabrics for apparel, is currently undergoing IPO review on the Main Board of the Shenzhen Stock Exchange. The company has formed a relatively complete technical system around regenerated fabrics, with core technologies focusing on key dimensions such as

[1][2].

• Holds
  79 patents
  and 4 software copyrights[1]
• Led or participated in the formulation of
  6 group standards and 1 industry standard
  [2]
• Certified as the Recycled Fiber Fashion Fabric Product Development Base by the China National Textile and Apparel Council
• Has R&D platforms such as the Hangzhou Technology Center and the Provincial Enterprise Institute of Functional Special Fabrics under the Zhejiang Provincial Department of Science and Technology[2]

Fuerun Co., Ltd. has formed five industrialized core technologies[3][4]:

Technology Field	Name of Core Technology	Technology Features
Recycled Environmental Protection	Production Technology of Recycled Colored Spun Polyester-Viscose Fabrics	From raw material selection to process innovation
Recycled Environmental Protection	Production Technology of Recycled Wool-like Polyester-Viscose Fabrics	Achieves full-chain breakthroughs
Recycled Environmental Protection	Functional Finishing Technology of Recycled Polyester-Viscose Fabrics	Function enhancement and sustainability throughout
Functional Low Carbon	Processing Technology of Waterproof and Breathable Low-Carbon Fabrics	Combination of environmentally friendly materials and low-carbon production
Functional Low Carbon	Processing Technology of High-Stability Textured Low-Carbon Fabrics	Fiber modification, texture structure design

1. Customized Equipment Transformation Capability
   • The company has carried out customized transformation of core equipment such as carding machines, warping machines, and singeing machines
   • Developed special processes such as “flexible carding”, “yarn steaming pretreatment”, and “low-temperature setting”[5]

2. Vertical Integrated Industry Chain Integration
   • Has built a vertically integrated manufacturing system covering design and R&D, spinning, weaving, dyeing and finishing, and post-finishing
   • Three production bases in Hangzhou, Nantong, and Vietnam collaborate with each other[3]

3. Brand Customer Barriers
   • Is the largest supplier (gold-level fabric supplier) of recycled polyester-viscose blended fabrics for H&M
   • Is the largest supplier of recycled fabrics for UNIQLO and GU
   • Customers include well-known domestic and international brands such as ZARA, Peacebird, and LILANZ[2]

4. International Certification Barriers
   • Has obtained Bluesign System Partner and HIGG FEM certifications
   • Has passed ISO9001 Quality Management System and ISO14001 Environmental Management System certifications
   • Its subsidiary Nantong Yuanji was included in the 2023 National Green Factory List by the Ministry of Industry and Information Technology[2]

1. Technological Iteration Risk
   • The Shenzhen Stock Exchange pointed out in the review inquiry: In the past 20 years, technological iteration in the industry has mainly occurred in the
     upstream recycled fiber sector
     , while the midstream fabric segment is about improvement and optimization, with no disruptive technologies[5]

2. Relatively Limited R&D Investment
   • The R&D expense ratios for the first half of 2022-2025 were 3.32%, 3.80%, 3.70%, and 3.41% respectively[5]
   • Among 183 R&D personnel, only 5 have a master’s degree or above (accounting for 2.73%), and over 70% have a junior college degree or below[5]

3. Patent Quality to Be Verified
   • The proportion of invention patents among the 79 patents is unknown, and the Shenzhen Stock Exchange has questioned its technical threshold[5]

According to industry research reports, the

[6]:

• Physical Method
  : Low technical difficulty but high requirements for raw materials, with limited raw material sources
• Chemical Method
  : High technical barriers, requiring high temperature and high pressure conditions, with only a few domestic enterprises having made breakthroughs

As a fabric processing enterprise, Fuerun Co., Ltd.'s technical barriers are mainly concentrated in

, rather than underlying core technology patents. This means that:

• Existing technological advantages may be
  lost instantly
  with the emergence of disruptive technologies in the industry[5]
• If competitors make major breakthroughs in technological R&D, the company will face market competition pressure

Assessment Dimension	Barrier Height	Explanation
Number of Patents	Medium	79 patents, with a certain scale in the industry
Technological Uniqueness	Below Medium	Mainly process improvements, not disruptive technologies
Equipment Barriers	Medium	Customized equipment provides certain protection
Customer Barriers	Relatively High	Deeply bound with international brands
Certification Barriers	Relatively High	Sound international certification system
Iteration Risk	Relatively High	Upstream technological iteration may impact existing advantages

Fuerun Co., Ltd. has built certain competitive barriers through patent layout, process accumulation, customer resources, and international certifications. However, since technological iteration in the industry mainly occurs upstream, and the company’s core technologies are mainly midstream process improvements, the long-term sustainability of its patent barriers is uncertain. It is recommended to continue to pay attention to the impact of upstream recycled fiber technology breakthroughs on the company’s competitive landscape.

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[1] Eastmoney.com - Leading Eco-Friendly Fabric Enterprise Fuerun Co., Ltd. Submits IPO Registration (https://finance.eastmoney.com/a/202512303605618014.html)

[2] Prospectus of Hangzhou Fuerun Co., Ltd. (http://pdf.dfcfw.com/pdf/H2_AN202512171802371563_1.pdf)

[3] Securities Times - Fuerun Co., Ltd. Promotes IPO on Shenzhen Main Board: Regenerated Fabric Business Lays a Solid Foundation (https://stcn.com/article/detail/3557516.html)

[4] China Financial Information Center - Driven by Core Technology and Intelligent Manufacturing, Fuerun Co., Ltd. Forges New-Quality Productivity in the Textile Industry through Innovation (https://caifuhao.eastmoney.com/news/20251224150229866692750)

[5] Caifuhao - Fuerun Co., Ltd. IPO: Behind the “Roller Coaster” Performance, Listing on the Shenzhen Main Board Hangs in the Balance (https://caifuhao.eastmoney.com/news/20251225085859949729750)

[6] Huaan Securities - In-Depth Report on Nylon: Consumption Upgrades Drive Demand Growth, Localization of Raw Materials Promotes Capacity Release (https://pdf.dfcfw.com/pdf/H3_AP202407091637732140_1.pdf)