New stock outlook | Consumer-grade projector leader Xgimi Technology goes public in Hong Kong, can it leverage the overseas market?

After its performance returned to positive growth, Xgimi Technology (688696.SH), a leading brand in the global projection industry, embarked on the journey to be listed in Hong Kong. On September 29, Xgimi Technology submitted its application for listing on the Main Board of the Hong Kong Stock Exchange, with CICC as its exclusive sponsor. The prospectus shows that Xgimi Technology plans to use the funds raised in this Hong Kong listing mainly for three purposes: accelerating international expansion through global branding and product marketing; enhancing research and development capabilities and expanding product portfolio; operating funds and general corporate purposes. Leading in the Chinese projection industry Founded in 2013, Xgimi Technology's core business revolves around the research, development, production, and sale of consumer-grade, automotive-grade, and engineering-grade smart projection products. In terms of product types, the company's projector products cover three main categories: long-throw projectors, short-throw projectors, and innovative projectors. As of the latest feasible date (September 22, 2025), Xgimi Technology's products are exported to over 100 countries and regions including Europe, North America, Japan, and Australia, with over 6,000 offline sales points worldwide and cumulative shipments exceeding 7 million units. According to Frost & Sullivan data, starting from 2018, Xgimi Technology has been the top-selling brand in the Chinese projection industry for seven consecutive years; starting from 2020, it has been the top domestic revenue champion for five consecutive years. In the Chinese high-end projection industry, it held a market share of 30.2% in terms of revenue in 2024, ranking first in both sales volume and revenue. Xgimi Technology's leading business scale is due to the company's differentiation advantages built on the technological level. With core advantages accumulated in self-developed optical engines, EagleEye computing optics, and GMUI interactive experiences, the company is able to expand its product offerings from consumer to automotive and engineering-level products. In the automotive projection business, focusing on in-car cabin audio-visual projection and smart car lamp projection, the products have been mass-produced and delivered to leading OEMs such as Chongqing Sokon Industry Group Stock, Anhui Jianghuai Automobile Group Corp., Ltd., and BAIC for use in multiple new energy vehicle models. In terms of engineering-grade projection products, Xgimi Technology launched the T10 series in September 2025, with a maximum brightness of 6400 CVIA lumens and support for 4K ultra-high-definition image quality, applied in high-end home theaters, commercial displays, and other scenarios. In terms of value-added services, in the Chinese market, the company provides audio-visual content and application distribution services through the GMUI platform and shares revenue with developers; in overseas markets, it cooperates with game developers and streaming platforms to enrich product features and revenue streams. Pressure on product prices leads to volatile performance From a financial perspective, Xgimi Technology's performance in recent years has shown a trend of revenue growth under pressure and significant profit fluctuations. From 2022 to 2024, the company's revenue was 42.2 billion RMB, 35.52 billion RMB, and 34 billion RMB, respectively, decreasing for two consecutive years, mainly due to changes in the demand structure of the consumer-grade projection market, with consumers preferring entry-level products, leading the company to introduce lower-priced models to cope with market trends, resulting in an overall decline in average selling price. In the first half of 2025, revenue slightly increased by 1.63% to 1.623 billion RMB, indicating a gradual recovery in market demand, but still significantly lower than the 2.036 billion RMB in the same period of 2022. Profit fluctuations are more pronounced. From 2022 to 2024, the company's profits were 501 million RMB, 120 million RMB, and 120 million RMB, respectively. In 2023, profits dropped significantly by 76% year-on-year, and although they stabilized in 2024, they still have a significant gap compared to the peak in 2022. In the first half of 2025, profits rose to 88 million RMB, mainly due to supply chain optimization and cost control, but the stability of profitability still needs to be observed. In terms of gross profit margin, it was 35%, 29.8%, and 30.3% from 2022 to 2024, and rose to 32.1% in the first half of 2025, although there has been some recovery, there is still room for improvement compared to historical highs, reflecting the impact of product restructuring and cost pressures on profitability. In addition to performance fluctuations, Xgimi Technology also faces multiple risks such as market competition, supply chain, and technological iteration, which need to be continuously monitored. In terms of industry competition and product price pressures, the global projection industry landscape is relatively clear, but the consumer-grade market has seen an influx of many new players, combined with the trend of large-screen TVs, leading to significant downward pressure on product prices. For example, from 2022 to 2024, the average selling price of the company's long-throw projection products decreased from 3400 RMB to 2700 RMB, further dropping to 2600 RMB in the first half of 2025. Regarding supply chain and cost risks, Xgimi Technology's production heavily depends on core components such as chips and laser modules. In 2024, the company's purchases from the top five suppliers accounted for 36.8% of total purchases, with the largest supplier accounting for 20.3%. In the first half of 2025, the company significantly increased the proportion of purchases from the top five suppliers to 51.9%, with the largest supplier accounting for 35%, mainly due to strategic advance procurement of core components to address potential supply risks and stocking requirements for automotive-grade products. It is worth noting that fluctuations in raw material prices due to factors such as fluctuations in commodity prices and geopolitical issues, if costs increase and cannot be effectively passed on to end-users, will directly impact profit levels. In terms of technological iteration and research and development risks, the projection industry evolves rapidly with trends such as 4K, laser technology, and AI integration. The company needs to continue investing in research and development to maintain innovation. From 2022 to 2024, research and development spending remained at 3.6-3.8 billion RMB, with the research and development expense ratio increasing from 8.9% to 10.8%. In the first half of 2025, it further increased to 12.2%, but the uncertainty remains on whether research and development investment can market-recognized products. For example, automotive-grade projection and engineering-level products are still in the market validation stage, and their contribution to profits is still unclear. Growth dividends still exist in the projection industry Despite the challenges, Xgimi Technology can leverage industry growth dividends and its own strategic layout to seize opportunities. This judgment is supported by the development prospects of the global projection industry and the company's differentiated positioning. From an industry perspective, according to Frost & Sullivan data, the global projection industry is in a steady growth phase. In 2024, the global projection market reached 17.012 million units in sales volume and 53.19 billion RMB in revenue; it is estimated that from 2024 to 2029, the compound annual growth rates of sales volume and revenue will be 13.0% and 11.4%, exceeding 31.3 million units and 91.23 billion RMB respectively by 2029. In specific segments, consumer-grade projection remains a core growth driver, accounting for 60.2% of revenue in 2024, with a projected compound annual growth rate of 11.4% from 2024 to 2029; automotive-grade projection, as an emerging sector, has shown even more significant growth, with revenue of 600 million RMB in 2024 and an estimated compound annual growth rate of 57.2% from 2024 to 2029, becoming a new growth engine for the industry; although engineering-grade projection has a relatively moderate growth rate of 8% from 2024 to 2029, with a market size of 20.6 billion RMB in revenue in 2024, there is still stable growth potential as commercial scene demands upgrade. From a company strategy perspective, the three directions of Xgimi Technology are expected to resonate with industry trends. In the consumer-grade projector market, the company has built a product matrix covering all price segments from entry-level to high-end, with the Play series, Z series targeting the mass market, and the RS series, T10 series positioning in the mid-to-high-end market segments, catering to different consumer needs; meanwhile, through the development of the GMUI system and ecosystem, the company enhances user stickiness, transitioning from "hardware sales" to a "hardware + service" model, with long-term prospects for revenue stability. Xgimi Technology has had breakthroughs in the automotive-grade and engineering-grade projector markets. In the automotive projection field, the increase in the penetration rate of new energy vehicles is driving the growth of in-car entertainment demand. The company has entered the supply chain of mainstream OEMs. If it can expand its customer base, the proportion of revenue from automotive-grade business is expected to gradually increase. In the engineering-grade market, the launch of the T10 series fills the gap in the company's high-end commercial field. With the upgrade of demand in cultural tourism, enterprise display, and other scenarios, it has the potential to become a new profit growth point. In terms of market dimensions, the company plans to increase investment in markets such as North America and Southeast Asia, replicate successful experiences in Europe and Japan, while exploring the integration of AI and projection technology, such as developing innovative products like AI glasses, expanding the boundaries of smart displays. It is important to note that the realization of the above prospects depends on several prerequisites. First, whether research and development investment can continue to technological advantages; second, whether automotive-grade and engineering-grade products can gain market recognition; third, whether overseas expansion can balance costs and revenue. In conclusion, from a business fundamentals perspective, Xgimi Technology has core advantages in technological barriers, market share, and global positioning, and the projection industry it operates in is still in a growth stage. In the long run, it is expected to achieve sustainable growth by deepening its consumer-grade market foothold and breaking through in the automotive-grade and engineering-grade markets. However, it is also important to recognize that the company faces multiple risks such as performance fluctuations, supply chain concentration, and technological iteration, especially against the backdrop of weak consumer demand and intensifying industry competition, the stability of profitability and growth certainty still needs to be verified over time. For investors, attention should be paid to the efficiency of capital use after its Hong Kong listing, progress in new business profitability, and expansion in overseas markets. For the industry, Xgimi Technology's listing may further normalize the projection industry, accelerate technological iteration and global competition, ultimately benefiting consumers and the overall industry development. In the future, whether Xgimi Technology can maintain its dominance in the Chinese market while claiming a more important position on the global stage, remains to be seen.