Having been listed on the A-share market for just over a year, ODM giant Longcheer Technology (603341.SH) is now "hurriedly" heading to the Hong Kong stock market. On December 30, the Hong Kong Stock Exchange website disclosed that Shanghai Longcheer Technology Co., Ltd. passed the main board listing hearing, with Citi, Haitong International, and Guotai Junan International acting as joint sponsors. The company formally submitted its H-share listing application to the Hong Kong Stock Exchange on June 27, 2025, less than a year and a half after it rang the bell on the Shanghai Stock Exchange main board (March 1, 2024). Behind Longcheer Technology's rush to the secondary market lies a performance story of stark contrasts—on one side is an ODM giant with annual revenue exceeding 40 billion yuan, and on the other, a "transformation newcomer" grappling with a sluggish core business and low gross margins, now betting on emerging sectors like AI glasses and automotive electronics. So, what is the true investment value of this ODM behemoth?
Zhitong Caijing observes that Longcheer Technology, founded in 2004, is a globally leading smart product and service provider, primarily offering solutions—including product research, design, manufacturing, and support—to renowned global smart product brands and leading tech enterprises. After more than two decades of development, the company has established the industry's most extensive and integrated ecosystem of smart products compatible with the most popular platforms, such as Android and Windows. Its product portfolio follows a "1+2+X" framework: "1" represents the core smartphone business; "2" focuses on key growth areas like personal computing and automotive electronics; and "X" encompasses a diverse range of emerging consumer electronics, including tablets, wearables, TWS earphones, and smart glasses. According to Frost & Sullivan data, based on 2024 consumer electronics ODM shipment volume, Longcheer Technology is the world's second-largest consumer electronics ODM manufacturer, holding a 22.4% market share. In terms of 2024 smartphone ODM shipments, it is also the world's largest smartphone ODM manufacturer, accounting for 32.6% of the market. Its client roster is notably impressive, featuring global consumer electronics giants such as Xiaomi, Samsung Electronics, Lenovo, Honor, OPPO, and vivo. Bolstered by this strong leading position, Longcheer Technology's scale advantages have become increasingly pronounced. Prospectus data shows that from 2022 to 2024, the company achieved revenues of 29.343 billion yuan, 27.185 billion yuan, and 46.382 billion yuan, respectively. Revenue growth in 2024 was particularly strong, surging 70.62% year-on-year, primarily driven by the company's expansion into multiple business segments, especially breakthroughs in AIoT products and automotive electronics. The smartphone business remains its primary revenue source. In 2024, revenue from smartphone products reached 36.133 billion yuan, constituting a significant 77.9% of total revenue. However, in the first three quarters of 2025, the company's revenue showed signs of decline—during this period, Longcheer Technology reported revenue of 31.332 billion yuan, a decrease of 10.3% year-on-year, potentially linked to weak global replacement demand, a slow overall recovery in consumer electronics, and insufficient hedging from emerging businesses. Concurrently, this ODM giant faces a notable weakness in profitability. According to the prospectus, from 2022 to the first three quarters of 2025, Longcheer Technology recorded net profits of 562 million yuan, 603 million yuan, 493 million yuan, and 514 million yuan, respectively, showing considerable volatility. Furthermore, the company's gross profit margin remained relatively low during the reporting periods, at 8.1%, 9.5%, 5.8%, and 8.3%, respectively. It is evident that despite surpassing 40 billion yuan in annual revenue and possessing certain scale advantages, the company's profitability remains constrained by its low gross margin levels. This situation is likely related to its business model. ODM refers to a scenario where a manufacturer designs a product, which may then be selected by other companies to be produced under their brand name, or with minor design modifications. The manufacturers undertaking these design and manufacturing tasks are ODM players, essentially "contract manufacturers." This industry inherently offers limited value-added, with profit margins naturally lower than those of brand owners. Coupled with pressure from both upstream and downstream sectors, the potential for profit improvement is not high. Therefore, analyzing key financial indicators reveals that while Longcheer Technology, as an ODM leader, boasts considerable revenue scale, its profitability remains a persistent concern.
Zhitong Caijing has learned that from 2021 to 2023, the consumer electronics industry experienced a downturn, primarily due to intensified inflation and geopolitical tensions weakening consumer purchasing power, alongside supply chain disruptions and chip shortages during the pandemic driving up prices for certain products, further suppressing market demand. In 2024, driven by technological innovation and the release of replacement demand, the industry began to recover. Simultaneously, the rapid proliferation of artificial intelligence technology accelerated the iteration of products like smartphones, tablets, and AIoT devices. New categories such as AI phones and AI PCs stimulated consumer interest in product upgrades. For instance, according to Frost & Sullivan, as human-computer interaction methods evolve, smart glasses are poised to become the consumer electronics category with the greatest growth potential. Global shipments are expected to surge from 9.6 million units in 2024 to 62.3 million units in 2029, representing a compound annual growth rate of 45.4%. Consequently, as its core business faces growth challenges, Longcheer Technology has begun focusing on emerging businesses, particularly AIoT (including smart wearables and smart glasses) and automotive electronics. Among these, AI glasses represent the company's most promising new growth avenue. In 2024, the company's ODM shipment volume for smart glasses exceeded 2 million units. Domestically, it has secured mass production projects for AI glasses from a leading domestic internet client. The growth potential of automotive electronics is equally significant; the company has established partnerships with industry leaders like Xiaomi, Jianghuai Automobile, Seres, and NIO, secured over ten designated projects, and has already commenced mass production and delivery for several product categories. This indicates that Longcheer Technology stands at a critical inflection point: it must leverage its leading position in the ODM sector to firmly grasp the AI hardware wave and rapidly scale up high-growth, high-value-added new businesses. Only by doing so can it fundamentally improve its business structure and profitability. However, it is important to note that nurturing new businesses carries inherent uncertainties—while sectors like AI PC and automotive electronics hold vast potential, their current scale remains small, and they face intense market competition. Whether they can successfully become a second growth curve remains to be seen.
In summary, Longcheer Technology's aggressive pursuit of a dual "A+H" listing highlights the growth dilemma faced by the ODM industry: immense scale coupled with thin profits. Its bets on emerging businesses like AI glasses and automotive electronics represent its forward-looking strategy to address this challenge. In the short term, its performance and valuation will likely remain constrained by the smartphone industry's cyclicality. Over the medium to long term, its prospects will depend on whether the growth of new businesses like AIoT and AI PC can effectively enhance the company's overall profitability and valuation benchmark.
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