After returning to positive growth, Xgimi Technology Co., Ltd. (688696.SH), a leading brand in the global projection industry, is embarking on a journey to list in Hong Kong. On September 29, Xgimi submitted its listing application to the Hong Kong Stock Exchange, with China International Capital Corporation as the sole sponsor. The prospectus reveals that the funds raised from this IPO will primarily be allocated to three main areas: enhancing global branding and product marketing to accelerate international expansion; strengthening R&D capabilities and expanding product offerings; and for working capital and general corporate purposes. Founded in 2013, Xgimi has established itself as a market leader in consumer-grade, automotive-grade, and engineering-grade smart projectors. Its product categories include long-throw, short-throw, and innovative projectors. As of the last practicable date (September 22, 2025), Xgimi's products are sold in over 100 countries and regions, including Europe, North America, Japan, and Australia, with more than 6,000 offline sales points and a total shipment exceeding 7 million units. According to Frost & Sullivan, Xgimi has maintained its position as the top-selling brand in China's projection industry for seven consecutive years since 2018 and has been the revenue leader domestically for five years since 2020. In the mid-to-high-end projector sector in China, Xgimi's market share reached 30.2% in 2024, ranking first in both sales and revenue. Xgimi's leading position is attributed to its differentiated technological advantages in optics development, Eagle Eye optical calculations, and GMUI interactive experiences, allowing it to expand product offerings from consumer-grade to more demanding automotive-grade and engineering-grade products. The automotive-grade projectors focus on in-cabin audiovisual projections and smart vehicle light projections, with mass production already delivered and applied by leading manufacturers such as Seres, JAC Motors, and BAIC in various new energy vehicle models. On the engineering-grade front, Xgimi launched the T10 series in September 2025, which boasts a brightness of up to 6400 CVIA lumens and supports 4K ultra-high-definition quality for high-end home theaters, commercial displays, and other applications. In terms of value-added services, the company provides audio-visual content and application distribution services in the Chinese market through the GMUI platform while collaborating with game developers and streaming platforms overseas to enhance product functionality and revenue streams. Fluctuating performance and pressure on product pricing can be observed in Xgimi's financial data. The company’s revenue over the years saw figures of 4.22 billion yuan, 3.552 billion yuan, and 3.4 billion yuan from 2022 to 2024, marking a decline for two consecutive years, largely due to the changing demand structure in the consumer-grade projector market, shifting consumer preferences towards entry-level products. In response to market trends, Xgimi introduced lower-priced models, resulting in an overall decline in average selling prices. In the first half of 2025, revenue slightly increased by 1.63% to 1.623 billion yuan, indicating a gradual market recovery, yet still showing a significant gap compared to 2.036 billion yuan in the same period of 2022. The profit has been more volatile: 2022-2024, profits reported were 501 million yuan, 120 million yuan, and 120 million yuan, with a significant year-over-year decline of 76% in 2023. Though stabilizing in 2024, it still lags behind the 2022 peak. In the first half of 2025, profit rebounded to 88 million yuan, primarily due to supply chain optimization and cost control, but profit stability remains to be monitored. Gross profit margins were 35%, 29.8%, and 30.3% for 2022-2024, rising to 32.1% in the first half of 2025, indicating potential for improvement compared to historical highs, highlighting the impact of product structure adjustments and cost pressures on profitability. In addition to performance volatility, Xgimi faces multiple risks regarding market competition, supply chain management, and technological iteration. The competitive landscape in the global projection industry is relatively clear, yet the entry of many new players into the consumer-grade market, coupled with the trend towards larger TV screens, significantly pressures product prices. For instance, the average selling price of long-throw projectors dropped from 3,400 yuan in 2022 to 2,700 yuan in 2024, and further down to 2,600 yuan in the first half of 2025. The company’s production heavily relies on core components like chips and laser modules. In 2024, purchases from the top five suppliers accounted for 36.8% of procurement, with the largest supplier representing 20.3%. In the first half of 2025, this figure jumped to 51.9%, with the largest supplier accounting for 35%, a strategic move to mitigate potential supply risks and prepare for automotive-grade product demands. It’s notable that raw material prices are subject to fluctuations from commodity markets and geopolitical factors; an inability to effectively pass on cost increases to end consumers would directly impact profitability. The rapid technological advancement in the projection industry mandates continuous investment in R&D to maintain competitiveness. R&D expenditures for 2022-2024 ranged from 360 million to 380 million yuan, with the R&D spending ratio increasing from 8.9% to 10.8%, and further rising to 12.2% in the first half of 2025. However, whether these investments will yield market-accepted products remains uncertain, especially as automotive-grade and engineering-grade projectors are still undergoing market validation with their profitability contributions unclear. Despite these challenges, Xgimi can leverage industry growth prospects and its strategic positioning to seize opportunities. According to Frost & Sullivan, the global projection industry is currently in a robust growth phase. By 2024, the global market size is projected to reach 17.012 million units, with revenue estimated at 53.19 billion yuan. The compounded annual growth rates for sales and revenue from 2024 to 2029 are anticipated at 13.0% and 11.4%, respectively, with projections indicating surpassing 31.3 million units and 91.23 billion yuan by 2029. In the consumer-grade sector, which remains the core growth engine, revenue is expected to account for 60.2% in 2024, with a compounded growth rate of 11.4% from 2024 to 2029. The automotive projection market, as an emerging field, is anticipated to grow even more significantly, with 600 million yuan in revenues in 2024 and a projected compounded growth rate of 57.2% from 2024 to 2029, becoming a new growth driver in the industry. Although the engineering-grade projection area shows more moderate growth with an 8% compounded annual growth rate from 2024 to 2029, it has a large market scale, with 20.6 billion yuan in revenue expected in 2024 and a stable growth space amid the upgrading demand for commercial applications. Strategically, Xgimi’s three areas of focus are likely to resonate with industry trends. In the consumer projection market, Xgimi has established a full price range product matrix covering entry to high-end segments, offering models like the Play series and Z series for the mass market, while the RS series and T10 series target mid-to-high-end consumers, catering to various consumer needs. Through the GMUI system and ecosystem development, Xgimi aims to enhance user retention, transitioning from a “hardware sales” model to a “hardware + services” approach, which is expected to stabilize revenues in the long term. Xgimi has also made strides in automotive and engineering-grade projectors. The rising penetration rates of new energy vehicles are driving demand for in-car entertainment, and Xgimi has entered the supply chains of mainstream manufacturers. If the company can expand its customer base further, automotive projection revenue could gradually increase. The T10 series launch addresses the company’s prior absence in the high-end commercial sector, with escalating demands in cultural tourism and enterprise displays likely to become new profit growth points. Geographically, Xgimi plans to intensify investments in North America, Southeast Asia, and other markets, aiming to replicate its success in Europe and Japan while exploring innovations such as AI integration in projection technology. It’s crucial to note that achieving these prospects relies on several key prerequisites: consistent conversion of R&D investment into technological advantages, market acceptance of automotive and engineering-grade products, and balancing costs and revenues during overseas expansion. In summary, considering its business fundamentals, Xgimi possesses core advantages in technological barriers, market share, and global layout, and it operates within a projection industry that is still in a growth phase. Nevertheless, the company must also navigate performance fluctuations, supply chain concentration, and rapid technological changes, especially amid soft consumer demand and intensified market competition, which raise questions about profit stability and growth certainty. Investors should pay attention to the efficiency of fund usage post-IPO, progress on new business profitability, and overseas market expansion. For the industry, Xgimi’s listing may further drive the standardization of the projection sector, hastening technological iterations and global competition, ultimately benefiting consumers and the overall industry development. Looking ahead, whether Xgimi can maintain its advantages in the Chinese market while securing a more significant presence on the global stage remains to be seen.
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