Lens Technology, a major supplier in Apple's supply chain, has experienced a significant earnings downturn. The company's first-quarter 2026 financial report revealed revenue of 14.14 billion yuan, a year-on-year decrease of 17.13%, with net profit attributable to shareholders turning negative at a loss of 150 million yuan, down 134.88% compared to the same period last year.
This marks the first simultaneous decline in both revenue and net profit for Lens Technology since 2022, a gap of four years. The primary reasons cited for the decline include reduced revenue from smartphones and computers due to factors such as rising memory chip prices.
Between 2021 and 2025, Apple consistently accounted for over 50% of Lens Technology's annual sales, representing a dominant share. With weakening demand in the consumer electronics sector, a slowdown in Lens Technology's core business has become unavoidable. At the same time, the company's smart vehicle and cockpit business, which began development in 2015, has also shown limited strength, while newer ventures like AI-enabled edge devices, AI servers, and robotics remain in the investment phase.
According to industry economic observer Liang Zhenpeng, "Lens Technology's performance is unlikely to improve significantly within this year, with evident pressure expected throughout the year." However, despite the company's urgent need for capital to support expansion, after distributing approximately 527 million yuan in dividends in the first half of 2025, Lens Technology recently announced plans for an additional dividend of about 2.37 billion yuan. Company founder Zhou Qunfei is expected to receive 1.473 billion yuan from this distribution.
The recent quarterly net profit decline represents the steepest drop in nearly seven years. Lens Technology's last simultaneous decline in first-quarter revenue and net profit occurred in 2022, when pandemic-related impacts caused a 22.15% drop in revenue and a 134.12% decrease in net profit. The current declines of 17.13% in revenue and 134.88% in net profit mark a return to negative growth after four years. In terms of net profit decline magnitude, the last time a steeper drop occurred was in the first quarter of 2019, seven years ago.
According to the financial report, the dual decline in revenue and net profit for the first quarter was mainly due to reduced income from smartphones and computers, coupled with impacts from exchange rate fluctuations. However, signs of this downturn were already visible in the fourth quarter of last year, when revenue decreased by 12.34% year-on-year to 20.747 billion yuan and net profit fell by 6.23% to 1.175 billion yuan. The first-quarter performance shows a more pronounced sequential decline.
Looking at full-year growth, following a post-pandemic recovery, Lens Technology's revenue and net profit growth entered a low-speed phase in 2025. Annual revenue reached 74.41 billion yuan, a 6.46% increase—the lowest growth rate in three years—while net profit was 4.02 billion yuan, up 10.87%, marking the slowest growth in four years.
High dependence on Apple remains a critical challenge, while the company's automotive and AI-focused businesses have yet to deliver substantial results. According to IDC, global smartphone shipments grew by only 1.9% in 2025, reaching 1.26 billion units, indicating a slowdown. Market analysts expect continued pressure on the smartphone and computer industries in 2026, primarily due to persistent tight supply and rising prices of key components like memory chips, which may lead to an overall market decline.
Weak consumer electronics demand driven by memory chip price increases, combined with direct profit losses from currency fluctuations, makes a short-term recovery challenging for Lens Technology. Meanwhile, the company's deep reliance on Apple as a single major customer introduces significant uncertainty regarding business diversification and sustainability.
Annual report data shows that overseas revenue in 2025 was 40.955 billion yuan, with the top customer contributing 33.491 billion yuan, accounting for 45.01% of total sales. This customer is Apple. Although Apple's contribution to Lens Technology's annual sales has gradually decreased from 2021 to 2025, it has remained above 50% for an extended period, underscoring its dominant role.
Liang Zhenpeng noted, "With the overall consumer electronics industry slowing down, Lens Technology's heavy reliance on Apple—nearly half of its revenue—makes sluggish core business growth inevitable." He added, "The company's second-quarter performance is expected to remain weak, and although some recovery may occur in the second half, full-year pressure will remain significant."
More concerning is the profitability challenge facing the smart vehicle and cockpit business, once a high-potential segment for Zhou Qunfei. In 2025, this business generated 6.462 billion yuan in revenue, an 8.88% increase, but growth slowed considerably from 18.73% in 2024. Moreover, its gross margin dropped sharply from 10.17% to 7.22%, a decrease of 2.95 percentage points.
While Lens Technology emphasizes its strategic focus on embracing AI opportunities—with布局 in AI edge devices, AI servers, embodied intelligent robots, and commercial aerospace—these emerging businesses require substantial early-stage investment. In the short term, the company faces a mismatch between investment outlays and performance output.
According to the financial report, Lens Technology's workforce grew to approximately 145,683 employees in 2025, up by about 9,225 from 136,458 in 2024. Production staff saw the largest increase, adding 6,412 employees, while sales, technical, and financial personnel also grew. In contrast, administrative staff decreased by 794, a reduction of about 7%.
The workforce expansion indicates that Lens Technology is in a growth phase. However, given the underperformance of the smart vehicle and cockpit business launched back in 2015, it remains uncertain how much long-term growth these newer ventures can deliver.
Liang Zhenpeng commented frankly, "Although these new businesses have begun to see some deliveries, their product competitiveness has not yet been thoroughly tested in the market. The competition in these sectors is intense, and Lens Technology's differentiated advantages remain unproven."
On the compensation front, Zhou Qunfei received an pre-tax annual salary of 5 million yuan in 2025, unchanged from 2024.
Interestingly, while the company seeks funding for expansion—including through a Hong Kong IPO—it has also engaged in frequent large-scale dividend distributions, channeling significant capital to founder Zhou Qunfei and other major shareholders.
In 2024, Lens Technology distributed approximately 1.984 billion yuan in dividends, representing 54.74% of its net profit attributable to shareholders. According to the company's Hong Kong IPO prospectus, ultimate control rests with Zhou Qunfei and her husband Zheng Junlong, who indirectly and directly hold a combined 62.13% stake in the company. This means that over 1.2 billion yuan of the 2024 dividend went to Zhou Qunfei personally.
Under the proposed 2025 dividend plan, the company intends to distribute 0.45 yuan per share, totaling approximately 2.37 billion yuan. Zhou Qunfei is expected to receive an additional 1.473 billion yuan. Combined with the approximately 527 million yuan dividend distributed in the first half of 2025, total dividends for the year could reach 2.897 billion yuan, with Zhou Qunfei potentially receiving 1.796 billion yuan.
The repeated large dividend distributions raise questions about whether Zhou is reluctant to use personal funds to support new business initiatives.
Investors have responded negatively to Lens Technology's recent performance. On the first trading day after the first-quarter report, the company's H-share price plunged by over 20%, hitting a record low since its Hong Kong listing. The A-share price also fell by more than 15%, touching a year-low of 24.94 yuan per share. By market close, both H-shares and A-shares had dropped over 12%.
Historically, Lens Technology's performance began recovering noticeably from the second quarter of 2025, with third and fourth-quarter revenues exceeding 20 billion yuan. Buoyed by recovery expectations, the A-share price rose over 41% throughout 2025. However, since mid-January 2026, influenced by market conditions and earnings performance, the stock price has declined by nearly 40%.
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