Core Viewpoint - After regaining positive growth, the global projection industry leader, XGIMI Technology (688696.SH), has embarked on the journey to list in Hong Kong, aiming to raise funds for international expansion, R&D enhancement, and general corporate purposes [1][20]. Company Overview - XGIMI Technology, established in 2013, focuses on the R&D, production, and sales of consumer-grade, automotive-grade, and engineering-grade smart projection products, including long-focus, short-focus, and innovative projectors [2]. - As of September 22, 2025, XGIMI's products are sold in over 100 countries and regions, with more than 6,000 offline sales points and cumulative shipments exceeding 7 million units. The company has been the sales champion in China's projection industry for seven consecutive years since 2018 and has held the revenue championship domestically for five years since 2020, with a market share of 30.2% in the mid-to-high-end projector sector in 2024 [5][8]. Financial Performance - XGIMI's financial data shows a trend of revenue pressure and significant profit fluctuations. Revenue for 2022, 2023, and 2024 was 4.22 billion, 3.55 billion, and 3.4 billion RMB, respectively, with a decline attributed to changing consumer preferences towards entry-level products, leading to a decrease in average selling prices [8][11]. - In the first half of 2025, revenue slightly increased by 1.63% to 1.623 billion RMB, but still showed a significant gap compared to 2.036 billion RMB in the same period of 2022 [8]. - Profit figures for 2022, 2023, and 2024 were 501 million, 120 million, and 120 million RMB, respectively, with a sharp decline in 2023. The first half of 2025 saw a profit recovery to 88 million RMB, mainly due to supply chain optimization and cost control [11]. Market Dynamics - The global projection industry is in a stable growth phase, with the market expected to reach 17.01 million units and 53.19 billion RMB in revenue by 2024. The compound annual growth rates for volume and revenue from 2024 to 2029 are projected at 13.0% and 11.4%, respectively [15][18]. - The consumer-grade projection segment remains the core growth driver, while automotive-grade projection is emerging with a projected revenue of 600 million RMB in 2024 and a compound annual growth rate of 57.2% from 2024 to 2029 [18]. Strategic Initiatives - XGIMI plans to enhance its product matrix across all price segments in the consumer-grade projector market and transition from a "hardware sales" model to a "hardware + service" model through the GMUI system [18][19]. - The company has made breakthroughs in automotive and engineering-grade projectors, with the T10 series set to launch in September 2025, targeting high-end commercial applications [19]. - XGIMI aims to increase investments in North America and Southeast Asia, replicating its success in Europe and Japan, while exploring AI integration with projection technology [19].

Core Insights - XGIMI Technology is focused on the research, production, and sales of various consumer-grade, automotive-grade, and engineering-grade smart projection products, with a global presence in over 100 countries and regions, and more than 6,000 offline points of sale [4] - The company has maintained its position as the top seller in China's projection industry for seven consecutive years since 2018 and has been the revenue leader in the domestic market for five years, holding approximately 30.2% market share in 2024 [4] - XGIMI has developed a strong capability base in optical technology and user interaction, allowing it to expand its product offerings to higher-demand automotive and engineering-grade projection products, with its automotive projection business already in mass production [4] Business Model - In China, XGIMI provides internet value-added services through its GMUI platform, allowing customers to access audio-visual content and various applications, sharing a portion of user payments with application developers [5] - Internationally, XGIMI collaborates with game developers to distribute games on third-party platforms and shares revenue according to pre-agreed ratios, also partnering with streaming platforms to facilitate access for overseas users [5] Financial Performance - For the fiscal years 2022 to 2025, XGIMI's revenues were approximately CNY 42.20 billion, CNY 35.52 billion, CNY 34.00 billion, and CNY 16.23 billion respectively, with net profits of CNY 5.01 billion, CNY 1.20 billion, CNY 1.20 billion, and CNY 0.88 billion [5] - The gross profit margin has shown fluctuations, with gross profits of CNY 1.48 billion (35.0%), CNY 1.06 billion (29.8%), CNY 1.03 billion (30.3%), and CNY 445.51 million (27.9%) over the same periods [8]

Core Insights - The automotive display market is projected to grow significantly, with a forecasted increase from $23.83 billion in 2024 to $47.37 billion by 2029, representing a compound annual growth rate (CAGR) of 14.7% [1] - The demand for in-car displays is driven by the rapid development of automotive intelligence and connectivity, with global automotive sales expected to reach 94.7 million units in 2025, a 3.7% increase from 2024 [3][4] - The market is characterized by high growth but low profitability, as increased competition and price wars among suppliers are putting pressure on margins [2][8] Industry Dynamics - The automotive display sector is seen as a "second growth curve" for the display industry, especially as traditional markets like smartphones and TVs face stagnation [2] - The shift towards smart cockpits has made displays a critical battleground, with the average screen size in vehicles increasing due to the rise of electric vehicles [4][5] - The penetration rate of Head-Up Displays (HUD) in passenger cars is expected to rise from 11% in 2023 to 16% in 2024, indicating a shift from high-end options to more mainstream features [4][5] Competitive Landscape - Major players like BOE, TCL Huaxing, and Tianma Microelectronics are shifting focus to automotive displays to utilize excess capacity from saturated consumer electronics markets [5][10] - The competition is intensifying as companies seek to establish deep partnerships with automakers, emphasizing the importance of collaborative development and customized solutions [9][13] - The trend of "de-Tier 1" is emerging, where panel manufacturers aim to bypass traditional Tier 1 suppliers to directly engage with automakers, enhancing profit margins and supply chain stability [6][13] Strategic Approaches - Companies are adopting different strategies to navigate the competitive landscape, with BOE focusing on a comprehensive ecosystem approach while Tianma is honing in on specific technologies like LTPS LCD [10][11] - TCL Huaxing is rapidly expanding its market share, achieving a 125% year-on-year growth in automotive display shipments in 2024 by forming strategic alliances with key automotive players [11][12] - The industry is witnessing a shift towards integrated solutions, with suppliers like Huayang Group and Desay SV becoming system integrators to create new competitive advantages [13] Future Outlook - Despite the promising growth potential, the automotive display market faces challenges such as price declines and the need for differentiation in a crowded field [6][8][14] - The industry's evolution is expected to lead to a more structured and healthy market environment over time, although this may require a period of adjustment [14]