On October 10, 2025, Xgimi Technology Co., Ltd. (极米科技) faced an unexpected shareholder selling announcement just 11 days after submitting its IPO application for the Hong Kong market. Shareholders Zhong Chao, holding 2.40% of the shares, and Liao Yang, holding 0.78%, plan to collectively reduce their holdings by no more than 1.98%, cashing out approximately 160 million yuan based on the market value on that day. This move comes during a critical window for the company as it seeks to enter the Hong Kong capital market, raising deep concerns about share stability and the company's prospects.
Shareholder cashing out: The logic of securing profits This reduction is not an isolated case. In April 2025, Zhong Chao and Liao Yang sold 700,000 and 350,000 shares, respectively, at a price of 111.06 yuan per share, totaling a 1.5% reduction in their holdings. By the time the reduction plan was disclosed on October 10, Xgimi's stock price had rebounded to 115.98 yuan per share, a 128.7% increase from the low of 50.71 yuan in late August 2024. Shareholders choosing to cash out collectively after the price rebound highlights a "secure profits" capital logic.
Notably, institutional investors are also exiting. In February 2025, employee stock platforms Chengdu Xgimi and Happy MiHua reduced their holdings by 1,908,900 shares, cashing out 195 million yuan; early investor Baidu's affiliates have repeatedly reduced their stakes since 2022, decreasing their ownership from 11.2% to less than 5%.
Performance under pressure: Operational concerns behind soaring net profits While Xgimi Technology's 2025 semi-annual report shows a staggering 2062.3% year-on-year increase in net profit attributable to the parent company, doubts remain about the quality of its operations. The company reported a net cash flow from operating activities of -440 million yuan, significantly diverging from the 77 million yuan in net profits after adjustments. Additionally, the inventory balance reached 1.151 billion yuan, a 24% increase from the beginning of the period, far exceeding revenue growth.
On an industry level, the global projector market saw a 4.2% decline in shipment volumes and an 8.6% decrease in sales in the first half of 2025. Xgimi's long-focus projection products have also experienced sales declines, coupled with a shift in consumer preference toward low-priced entry-level products, leading to a drop in average selling prices and further compressing profit margins. In 2024, Xgimi's income from projectors and accessories accounted for a substantial 93.07%, highlighting the risk of business concentration.
Transformational growing pains: Can automotive and overseas business break through? To reduce reliance on a single business model, Xgimi Technology is accelerating its foray into automotive projection and overseas markets. In the first half of 2025, the company secured several projects in the smart cockpit and smart headlights sectors, with its products already featured in the AITO M8/M9 models. Although overseas revenue reached 228 million yuan, it still represented a 4.63% decline year-on-year.
The automotive business requires substantial upfront R&D investments to meet the stringent standards of the automotive industry, while the market is still in its nurturing phase, and consumer demand has yet to fully materialize. Moreover, the company has reduced its workforce for three consecutive years since 2022.
Can the Hong Kong IPO serve as a breakthrough? Under the dual pressure of shareholder selling and weakened performance, Xgimi Technology has chosen to pursue an IPO in Hong Kong to seek capital breakthroughs. The market is keenly observing whether this fundraising can provide adequate resources for its automotive business and overseas expansion and restore market confidence. However, the exit of shareholders during this critical IPO phase undoubtedly heightens investor concerns about share stability.
This dual test of capital and performance is pushing this once-renowned "projector king" to a crossroads in its transformation.
Comments