On August 29, Xgimi Technology Co.,Ltd. (688696) released its 2025 interim report. During the reporting period, the company achieved operating revenue of 1.626 billion yuan and net profit of 88 million yuan. Notably, government subsidies recorded in the income statement during the first half of the year reached 48.87 million yuan, accounting for more than half of the period's profit. Government subsidies have long played an important role in the company's performance.
Xgimi Technology Co.,Ltd. was established in 2013, headquartered in Chengdu High-tech Zone, primarily manufacturing projection equipment, and listed on the Science and Technology Innovation Board in 2021. In the early days of listing, the company's stock price performed strongly, once surging to 614.43 yuan per share with a total market value exceeding 40 billion yuan, becoming one of the most watched stocks on the Science and Technology Innovation Board at that time. However, after the peak performance, Xgimi Technology Co.,Ltd. began a sustained decline. As of the close on September 4, 2025, the stock price had fallen to 127 yuan per share with a total market value of 8.9 billion yuan, representing a decline of nearly 80% from its historical high.
The dramatic stock price decline corresponds with Xgimi Technology Co.,Ltd.'s heavy reliance on government subsidies for profits over the past two and a half years, and multiple questions remain behind these substantial government subsidies.
Over 75% of Net Profit from Government Subsidies
According to financial report data, over the past two and a half years, Xgimi Technology Co.,Ltd.'s total net profit was 328 million yuan, while government subsidies recorded in the income statement during this period totaled 249 million yuan, accounting for 75.82% of net profit. This data indicates that government subsidies have become the primary source of Xgimi Technology Co.,Ltd.'s profits.
Taking 2023 as an example, Xgimi Technology Co.,Ltd. received over 25 government subsidies, including "industrial support funds," "financial industry development special funds," "innovation capability awards," "international logistics subsidies," and others, covering various subsidies at district, municipal, and provincial levels, totaling 112 million yuan, accounting for 93% of annual net profit. In 2024, Xgimi Technology Co.,Ltd. still received over 15 government subsidies, totaling over 88 million yuan, accounting for 73% of net profit.
It's worth noting that among various government subsidies, the support from Yibin municipal government for the Yibin Xgimi Intelligent Optoelectronics Industrial Park project (hereinafter "Yibin Xgimi Industrial Park") stands out particularly. As one of Xgimi Technology Co.,Ltd.'s core industrial layouts, the construction and development of this industrial park cannot be separated from strong local government support. Related subsidies are not only large in scale but also continuously "enhance" the company's performance.
The Mystery of Over 800 Million Yuan Industrial Park Subsidies
Going back to November 2018, Xgimi Limited (later renamed "Xgimi Technology Co.,Ltd.") signed an "Investment Agreement" and "Supplementary Agreement" with the Management Committee of Yibin Lingang Economic and Technological Development Zone (hereinafter "Lingang Economic Development Zone Management Committee"). The agreement stipulated that Xgimi Limited would invest 1.5 billion yuan locally to build an intelligent optoelectronics industrial park, while the Lingang Economic Development Zone Management Committee would provide 800 million yuan in project construction support funds, 35 million yuan in industrial settlement funds, 300 million yuan in industrial support funds and working capital loan interest subsidies, high-end talent subsidies, etc., to be paid in stages according to project implementation progress.
That same month, Xgimi Technology Co.,Ltd. established a wholly-owned subsidiary in Yibin called Yibin Xgimi Optoelectronics Co., Ltd. (hereinafter "Yibin Xgimi") to inherit the rights and obligations of the Yibin Industrial Park project. According to enterprise information, Yibin Xgimi has a registered capital of 20 million yuan and is 100% owned by Xgimi Technology Co.,Ltd.
By the end of December 2019, Yibin Xgimi signed construction contracts with two companies: first, commissioning Yibin Gangteng Real Estate Development Co., Ltd. to build phases one and two of the industrial park with a tentative contract amount of 459 million yuan; second, commissioning Yibin Gangteng Construction Co., Ltd. to build phase three of the industrial park with a tentative contract amount of 191 million yuan. In March 2020, the Yibin Xgimi Industrial Park officially began construction, planning to build 5 production lines covering complete machine production lines, optical engine production lines, and laboratories. The 2020 annual report mentioned that the main buildings of the Yibin Xgimi Industrial Park had been basically completed; the 2021 annual report disclosed that the industrial park had been basically put into use.
During the construction period of the Yibin Xgimi Industrial Park, the project budget was adjusted multiple times, increasing to 965 million yuan in 2021.
According to the construction in progress items disclosed in Xgimi Technology Co.,Ltd.'s financial reports, the total investment amount for the Yibin Xgimi Industrial Park project is approximately 970 million yuan.
Looking at the government subsidy disbursement situation, in 2019, Yibin Xgimi received 35 million yuan in industrial park project support funds; in 2022 and 2023, it received 400 million yuan in support funds respectively. According to announcements, the Industrial and Service Industry Bureau of Yibin Sanjiang New Area (formerly Lingang Economic Development Zone) agreed to convert this construction support funding into formal government subsidies. This means that the Yibin Xgimi Industrial Park received at least 835 million yuan in government subsidies in total, accounting for over 85% of the industrial park's total investment.
Regarding the accounting treatment of government subsidies for this project, Xgimi Technology Co.,Ltd. recorded them as "deferred income - government subsidies related to assets" and amortized them into the income statement's "other income - government subsidies" based on asset useful life. Nearly 29 million yuan was recorded as other income each year in 2023 and 2024. As of the end of June 2025, the book balance of Yibin Xgimi Industrial Park government subsidies in deferred income was 763 million yuan.
A staff member from Yibin's investment promotion department told reporters that currently Yibin's investment promotion policies mainly focus on land acquisition, factory rental, bank loan coordination assistance, and industrial fund investment. If companies hope to obtain actual cash one-time rewards, they can pay attention to "upgrading to above-scale enterprises." After companies settle in, if their output value reaches a specific scale, they can apply for corresponding subsidies. When asked whether direct financial support existed in previous years, the staff member said there used to be tax refund policies, but such policies are no longer allowed after the implementation of the "Fair Competition Regulations." Additionally, they had not heard of other policies that could directly provide large amounts of financial subsidies.
"We cannot get such high government subsidies. Usually, local government subsidy ratios are mostly between 30% to 50%. The government subsidy ratio obtained by Xgimi Technology Co.,Ltd.'s Yibin Industrial Park far exceeds normal standards," a listed company CFO frankly stated.
Renowned financial and tax expert Liu Zhigeng pointed out in an interview: "Such large amounts of funds appearing in the form of subsidies are uncommon; large government subsidies for new projects by local governments are even more uncommon. If this company has already created a lot of tax revenue and made many contributions to the local economy, subsidies are possible."
How Can Subsidiary Revenue Exceed Parent Company Consolidated Income?
According to public reports, since production began in December 2020, the Yibin Xgimi Industrial Park has built 6 projection production lines, 6 lens production lines, and 8 optical engine production lines, forming a closed-loop industrial chain from lens design, optical engines to complete intelligent projection equipment design, development, and manufacturing.
From operational data, Yibin Xgimi generated nearly 1.9 billion yuan in revenue in 2020, and annual operating revenue has exceeded 3 billion yuan since 2021.
Notably, as a wholly-owned subsidiary, Yibin Xgimi's operating revenue regularly exceeds Xgimi Technology Co.,Ltd.'s consolidated statement revenue. In 2022, Yibin Xgimi's revenue was nearly 70 million yuan higher than Xgimi Technology Co.,Ltd.; in 2024, this gap widened to 400 million yuan; in the first half of 2025, Xgimi Technology Co.,Ltd.'s consolidated revenue was 1.626 billion yuan, while Yibin Xgimi achieved operating revenue of 1.919 billion yuan, nearly 300 million yuan higher than the listed company.
This occurs despite Xgimi Technology Co.,Ltd. having multiple subsidiaries. Based solely on revenue data, in 2024, the combined revenue of four subsidiaries - Yibin Xgimi, Xgimi Hong Kong, Jichuang Optoelectronics, and Xgimi Vision - reached 6.39 billion yuan, significantly exceeding the listed company's consolidated revenue.
A listed company CFO explained to reporters: "When a listed company's consolidated revenue is less than its wholly-owned subsidiary's revenue, it's likely due to internal transaction eliminations. If a subsidiary's revenue mainly comes from transactions with the parent company or related parties, this revenue will be eliminated in consolidated statements, resulting in consolidated revenue being lower than the subsidiary's individual revenue."
Based on this analysis, there may be substantial internal transactions between Xgimi Technology Co.,Ltd. and its subsidiaries, or among subsidiaries themselves.
Yibin Xgimi Increases Revenue Without Profit Growth?
Despite Yibin Xgimi's considerable revenue scale, its profitability has long been weak, not only experiencing multiple losses but also maintaining an almost break-even state overall. From 2020 to 2024 and the first half of 2025, the company's cumulative net profit was only about 4 million yuan. Having initially paid in 20 million yuan in registered capital upon establishment, Yibin Xgimi's net assets today are only 21.57 million yuan.
However, at the listed company's consolidated level, the profitability situation is completely different. Xgimi Technology Co.,Ltd. has been profitable continuously since 2020, and by the time of the 2025 interim report release, cumulative net profit during this period reached 1.58 billion yuan.
"The profit difference is most likely due to internal low-price related-party sales and cost allocation logic. One approach is for subsidiaries to sell products to parent companies at prices below market rates, even at cost; second, parent companies handle high value-added segments while subsidiaries handle low value-added segments; third, unreasonable allocation of costs and expenses between parent and subsidiary companies can all cause situations where subsidiaries have high revenue but low profits," said a listed company CFO.
Overall, the Yibin Xgimi Industrial Park's actual investment was less than 1 billion yuan but received over 800 million yuan in government subsidies in full. After the project became operational, although its implementing entity Yibin Xgimi has substantial revenue scale that repeatedly exceeds the listed company's consolidated revenue, its own profitability remains consistently weak against the backdrop of overall listed company profitability, failing to make effective tax contributions locally.
To better understand the situation, reporters inquired with relevant Yibin departments about government documents issued regarding these subsidies. A staff member from the Publicity Department of the Party and Mass Work Department of Yibin Sanjiang New Area replied: "We have consulted the Industrial Bureau's opinion. Regarding matters involving the Xgimi project, it's not convenient for external publicity and reporting. We apologize that these materials cannot be provided."
Meanwhile, reporters contacted Xgimi Technology Co.,Ltd.'s investor relations office and sent interview questions covering related issues. Xgimi Technology Co.,Ltd. replied: "What we are required to disclose according to regulatory requirements, we have already disclosed. Some things are not convenient to disclose."
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