Another supplier of Anker Innovations is aiming for an IPO

The suppliers behind the huge sales are also making a fortune in silence!

Recently, the financial reports of cross-border e-commerce sellers for the first three quarters have been released one after another. According to the financial report , Anker Innovations' revenue in the first three quarters was about 16.449 billion yuan, and its net profit attributable to the parent company was about 1.472 billion yuan. Guangdong Hongjing Optoelectronics Technology Co., Ltd. (hereinafter referred to as "Hongjing Optoelectronics") , as the supplier behind Anker Innovations and Inspur Innovations, had a revenue of up to 790 million yuan and a net profit of up to 145 million yuan in the first three quarters. Currently, Hongjing Optoelectronics is making a sprint towards the A-share market, and it was approved by the Listing Committee meeting on October 14.

This year, the company will achieve a GMV of 1.1 billion yuan

Hongjing Optoelectronics was founded 12 years ago. At that time, smart hardware mainly used for video applications generally had pain points such as low video clarity and small field of view. Therefore, the company established the market direction of providing high-definition and wide-angle optical lenses, took all-glass optical lenses as the entry point, and organized a team to develop, design, and manufacture optical lenses.

Currently, there are two major product lines: smart car optical lenses and camera modules and emerging consumer optical lenses and camera modules. Among them, smart car products are used in smart cockpits and smart driving, and emerging consumer products are used in smart homes, panoramic/sports cameras and other products.

Hongjing Optoelectronics has a prominent market position in various segments. Among them, in the field of smart cars, according to the TSR research report, its market share of the global automotive optical lens market in 2022 will be 3.70%, ranking sixth in the world; in the field of smart homes, according to iResearch data, its market share in the global home camera (including video doorbell) optical lens field in 2023 will be 9.95%; in the field of panoramic/sports cameras, according to Frost&Sullivan data, its market share of the global panoramic camera lens module market in 2023 will reach more than 25%.

Today, Hongjing Optoelectronics is in a stage of rapid development. The prospectus shows that in 2021-2023, the company's operating income will be 252 million yuan, 446 million yuan and 773 million yuan respectively; the net profit attributable to the parent company after deducting non-recurring items will be 14.97 million yuan, 50.56 million yuan and 114 million yuan respectively. According to data calculations, in 2021-2023, the company's operating income will have a compound growth rate of 75.24%, and the compound growth rate of net profit attributable to the parent company after deducting non-recurring items will reach 176.31%.

Moreover, the company's performance this year is expected to exceed 1 billion yuan. It is estimated that in 2024, Hongjing Optoelectronics will achieve operating income ranging from 1.05 billion yuan to 1.1 billion yuan, a year-on-year increase of 35.83% to 42.30%, and net profit ranging from 160 million yuan to 175 million yuan, a year-on-year increase of 37.42% to 50.30%, and net profit attributable to shareholders after deducting non-recurring items ranging from 160 million yuan to 175 million yuan, a year-on-year increase of 39.99% to 53.11%.

The company's sales are divided into domestic sales and overseas sales. The proportion of overseas revenue is about 30%, mainly from customers in Singapore, the Philippines, Hong Kong, China, Taiwan and other countries or regions, mainly including EMS manufacturers such as Chipson Electronics, Foxconn Industrial Internet, AZTECH and other EMS manufacturers established overseas procurement platforms or manufacturing plants.

Arashi Innovation contributes nearly half of the revenue

Overall, most of Hongjing Optoelectronics' revenue comes from emerging consumer optical lenses and camera modules. In 2023, this product line contributed 590 million yuan in GMV, accounting for more than 77% of its total revenue.

The downstream application areas of emerging consumer optical lenses mainly include smart home, panoramic/sports camera lenses, and intelligent imaging devices such as machine vision. In the field of smart home, Hongjing Optoelectronics has become an important supplier of 3C hot seller Anker Innovation. In the field of panoramic/sports cameras, it has also established in-depth cooperation with the top player in the sports camera industry, Shadow Innovation.

As a global leader in the panoramic/sports camera industry, Inspur's sales revenue is showing a rapid growth trend. According to its prospectus, its operating income in 2021 is about 1.251 billion yuan to 1.351 billion yuan. In addition, according to other news, its operating income in 2022 will reach more than 2 billion yuan, and its operating income in 2023 will be nearly 4 billion yuan.

According to a report by Frost & Sullivan, Ailin Innovation has the largest global market share in panoramic cameras, with a market share of 50.7% in consumer-grade panoramic cameras and 55.4% in professional-grade panoramic cameras in 2022.

In fact, Hongjing Optoelectronics and Inspur Innovation have already started cooperation as early as 2015. Now Inspur Innovation is the main customer of Hongjing Optoelectronics' panoramic/sports camera optical lenses and camera module products, and its products have covered many terminal products such as consumer-grade smart imaging devices and professional-grade smart imaging devices under Inspur Innovation.

The prospectus shows that since 2022, Inspur Innovation has been the largest customer of Hongjing Optoelectronics. In the first half of this year, its sales revenue accounted for 46.94% of its operating income, and its main sales content is emerging consumer camera modules.

From 2021 to the first six months of 2024, the revenue from panoramic/sports camera optical lenses and camera modules of Hongjing Optoelectronics accounted for 5.85%, 33.33%, 46.29% and 47.38% of its main business revenue, respectively. Among them, its sales revenue from panoramic/sports camera optical lenses and camera modules to Yishi Innovation accounted for 87.56%, 99.09%, 99.75% and 99.72% of the sales revenue of panoramic/sports camera optical lenses and camera modules in the same period.

However, over-reliance on Inspur Innovation also brings two major risks to Hongjing Optoelectronics: First, if there is uncertainty in the sales of Inspur Innovation's terminal products, it will have an adverse impact on the sustainability and stability of the company's sales revenue of related products; second, once Inspur Innovation requires it to lower prices, the gross profit of such products will decline, which will have an adverse impact on its profitability.

The market size of the subdivided track will exceed 50 billion yuan

From the previous article, we can see that Hongjing Optoelectronics performs best in the panoramic/sports camera segment. So, what is the market prospect of this segment?

According to Frost & Sullivan, the global action camera market size will be 26.61 billion yuan in 2022 and is expected to grow to 46 billion yuan in 2026, with a compound growth rate of 14.2% from 2017 to 2026. The action camera market size will maintain rapid growth.

According to data from Frost & Sullivan, panoramic cameras have the highest sales share in the North American market, followed by the European market. The Chinese market is still relatively small compared to other markets, accounting for about 17% of the market, but it maintains a high growth rate. The global panoramic camera market size will reach 4.13 billion yuan in 2022 and is expected to grow to 6.31 billion yuan in 2026, with a compound growth rate of 10.8% from 2017 to 2026.

In the emerging consumer panoramic/sports camera field, the world's leading consumer-grade panoramic camera companies include China's AYS, Japan's Ricoh and the United States' GoPro. According to Frost & Sullivan data, in 2022, the market shares of the above three companies were 50.7%, 19.7% and 17.8%, respectively, totaling nearly 90%, and the market concentration is relatively high.

From the perspective of development trends, miniaturization and wearability have become the development trend of smart imaging equipment products in recent years. Traditional imaging equipment manufacturers have shifted their research and development focus from SLR products to lightweight micro-single mirrorless products.

At the same time, panoramic technology provides a unique method for recording phenomena, discovering patterns, and predicting results. It has been deeply applied in many industries such as video, film, education, medical care, sports events, and security. With the continuous development and innovation of panoramic technology, it is expected that the application areas of panoramic/sports cameras will be further broadened in the future, empowering industry upgrades.

Hongjing Optoelectronics

Anker Innovations

Shadowstone Innovation