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Author: Taylor, Editor: Xiaoshimei

After turning losses into profits in 2023, OFILM disclosed on July 9 that it expects to achieve a net profit of 36 million to 45 million yuan in the first half of the year, continuing to turn losses into profits.

"There is no winter that is insurmountable, and no spring that will not come. Everything will pass, and everything will come."

The spring that Cai Rongjun had been looking forward to seemed to have arrived.

After being kicked out of the "Apple supply chain" by Apple, who will be OFILM's next big customer? It has been reported that OFILM has obtained most of the orders for Huawei Mate 60 series rear cameras, front cameras and fingerprint modules.

Regarding the supply of mobile phones to Huawei, Cai Rongjun did not give a direct response due to the confidentiality agreement, but said: "Live stubbornly." It seems that everything is going smoothly, but in fact, it feels like a boat has passed through thousands of mountains.

Judging from the company's increase in production lines, large-scale recruitment of workers in its factories, and research by professional institutions, it has been basically confirmed that OFILM will mainly supply Huawei.

Like Huawei, Cai Rongjun also expects a U-turn.

On April 23, 2023, Cai Rongjun pointed out that after experiencing the lowest point in 2022, the company has bottomed out and stabilized in 2023 and entered a new stage of development. We must sound the "counterattack horn."

By binding with Huawei, OFILM has "resurrected from the dead", which also indirectly confirms its technical strength. Moreover, due to the US technology suppression, Huawei's mobile phones use domestic supply chains, and the related performance improvement will also have strong sustainability.

In terms of lenses, OFILM is deeply involved in Huawei's 6P-7P high-end lens project, and samples of the next-generation 7P products have been sent to Huawei. Therefore, OFILM optical modules are likely to be the main supplier of new products next year.

Moreover, as consumer electronics is in a period of cyclical adjustment, there will be a major reshuffle of component suppliers, and the position of leading companies will become more stable after the less competitive companies withdraw.

In addition, due to the hot downstream demand, there is a short-term shortage of lens and other modules, and suppliers have also increased prices. An analysis report pointed out that at present, the price of related products of suppliers of under-screen optical fingerprint modules for Huawei Mate 60 series has increased by 15% to 20%, and some models have even increased by 30%.

The twin growth of volume and price has greatly increased the chances of a reversal for OFILM. The capital market has already taken the lead in reacting. Previously, the company's stock price had risen by the daily limit for six consecutive days, and its market value had directly soared by 15 billion.

After being kicked out by Apple, OFILM's performance plummeted.

In addition, since 2020, Huawei, a major customer of the company, has seen its mobile phone business hit a low point due to US suppression. In 2021, Huawei's shipments fell out of the top five in the world. Both major customers suffered major changes, and Cai Rongjun ushered in the darkest moment of his life.

The once star company fell to the bottom in an instant. In the three years from 2020 to 2022, OFILM lost more than 9.7 billion yuan. Combined with the losses in the first half of 2023, the total loss exceeded 10 billion yuan.

The secondary market shunned it, and OFILM's stock price fell nearly 80% from its peak; it should be noted that during its heyday in 2012-2013, its stock price rose more than 10 times. From 2012 to 2017, when it peaked, its stock price rose more than 21 times, with a market value of more than 70 billion yuan.

As the stock price rises and falls, the wealth of Cai Rongjun's family has also experienced a roller coaster ride. Since 2014, when the company's performance entered an upward trend, the Cai family's wealth has expanded from 5 billion yuan to 17.2 billion yuan in 2018.

But since then, his wealth has been declining year by year, and his ranking has fallen outside the top 400. From 2022 to 2023, he did not even enter the top 500.

With ups and downs and twists and turns, OFILM is probably one of the companies that has suffered the most in the A-share market.

The consumer electronics industry is updating and iterating at an extremely fast pace. Each generation of products will have new technologies and experiences, which will be fatal for companies that fail to seize the trend and make early arrangements.

In addition, over-reliance on a single large customer, especially companies in Apple's industrial chain, such as Goertek and O-Film, have been greatly hurt. Cai Rongjun should have a deep understanding of this today.

It can be said that "survival" is a topic that all industry participants must face, and it is also the main theme of Cai Rongjun's business campaign.

Cai Rongjun graduated from the Department of Mechanical and Electrical Engineering of Shantou University, which was established with donations from Li Ka-shing. Li Ka-shing has always been his idol. In 1995, after graduating from university, he joined Kodak in Japan and worked his way up from a grassroots technician to a core engineer. Therefore, Cai Rongjun is not only a graduate of a professional school, but also has a deep scientific research experience.

During this period, in 2001, Hong Kong Xunqi and Shenzhen Zhixiong Electronics jointly established OFILM, which initially engaged in precision thin film components for fiber optic communications.

In other words, Cai Rongjun was not the founder of OFILM. Later, OFILM invited Cai Rongjun and Cai Gaogao to serve as general manager and deputy general manager to help the company with its R&D.

In September 2004, the original shareholders transferred the controlling stake to the Cai brothers for RMB 4.39 million, and OFILM officially entered the era of Cai Rongjun's leadership.

The Cai brothers were familiar with optoelectronic technology. Two years later, OFILM launched infrared filters, becoming the world's number one in this market segment, occupying one-third of the global market share. With this advantage, OFILM was successfully listed on the Shenzhen Stock Exchange in August 2010.

But in the first year of listing, Cai Rongjun sensed a crisis: the company's revenue grew significantly, but its net profit remained stagnant. He clearly realized that the existing business had reached its ceiling and there was little room for growth.

At that time, Apple was driving the craze for touch-screen smartphones. Cai Rongjun keenly sensed the huge opportunities in the mobile consumer electronics industry and invested all the funds raised from the IPO into the touch-screen field.

This battle was a great success. Cai Rongjun led the company to surpass TPK and become the world's largest touch screen manufacturer. After a brief hiatus in 2011, OFILM's performance flourished in 2012-2014, with revenue and net profit soaring like a rocket, and the stock price soaring more than 10 times in just two years from 2012 to 2013. OFILM has since become an important supplier in the consumer electronics industry.

But the only constant in the high-tech industry is "change" itself. Since then, Apple and Samsung have adopted different touch screen solutions, and the industry reshuffle has intensified. In 2015, OFILM's profits fell again. The old touch screen business was squeezed into the low-end market, and the profit became increasingly thin, and the new business did not improve.

At this time, OFILM was "in trouble both internally and externally, and in a period of transition."

At this time, the micro-camera project that Cai Rongjun had been involved in in 2012 took on a major role. As consumers’ requirements for mobile phone photography and videography gradually increased, device manufacturers increased the order volume and technical requirements for cameras accordingly. Cai Rongjun, who had made early preparations, once again hit the right spot. At the same time, Cai Rongjun also decided to enter the fingerprint recognition field.

After the company's performance reached a low point in 2015, it reached its second peak in 2016-2017, achieving net profits of 719 million and 823 million respectively. The stock price also soared to a historical peak in November 2017.

But in 2018, due to excessive investment expenditure, poor management, and failures with LeTV and Gionee, the company suffered a loss of more than 500 million yuan after impairment of inventory, which exposed OFILM's internal control problems after years of rapid growth.

Judging the situation and learning from failures are important signs of an entrepreneur's maturity. Cai Rongjun said that he pays more attention to failures rather than success stories.

The blow in 2018 made him calm down and carry out internal management reform of OFILM to "create efficiency with precision". This year, the company successfully turned losses into profits.

But what happened next was beyond the expectations of the outside world. Apple tore up the cooperation agreement, which made Cai Rongjun see the cruelty and cold-bloodedness of commercial competition. OFILM fell from the peak to the quagmire, and was even used as a negative example by the outside world and frequently criticized.

But as he said: Life is a repetition of adversity, no one can escape it, it will come. Seemingly terrible adversity is the source of success. In the face of adversity, what we have to do is to face it calmly, accept it, and then solve it.

At present, Huawei has been reborn from adversity, and OFILM has the confidence to survive. The company has stepped up its efforts and sounded the clarion call for a counterattack.

Don't forget that as early as the trough in 2015, Cai Rongjun took the lead in entering the field of Internet of Vehicles. The following year, he raised 1.37 billion yuan to strengthen the research and development of automotive lenses and seize the automotive intelligent business. In the first half of 2023, smart car products contributed 616 million yuan in revenue, accounting for nearly 10%.

From infrared cutoff filters to touch screens, to micro cameras and fingerprint recognition, and then to automotive electronics, OFILM has been constantly "struggling". Even in the face of difficulties, Cai Rongjun has not stopped betting on the future.

The development history of OFILM is the history of the rise and fall of the consumer electronics industry. However, during the low period, Cai Rongjun devoted himself to the layout of forward-looking technologies and finally ushered in the moment of Jedi counterattack.

If it weren't for years of technological accumulation, this "luck" would not have fallen on OFILM.

Disclaimer

The content of this article related to listed companies is the author’s personal analysis and judgment based on the information disclosed by listed companies in accordance with their legal obligations (including but not limited to interim announcements, regular reports and official interactive platforms, etc.); the information or opinions in the article do not constitute any investment or other business advice, and Market Value Observation shall not bear any responsibility for any actions arising from the adoption of this article.