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Produced by Radar Finance Hongtu | Edited by Mo Enmeng | Deep Sea

After reporting a decline in both revenue and net profit last year, Xgimi Technology still failed to deliver an impressive performance in the first half of the year.

According to the performance forecast recently released by Xgimi Technology, in the first half of this year, Xgimi Technology expects that the net profit attributable to the parent company's owners in the first half of the year will decrease by 96.04%, and the net profit after deducting non-recurring gains and losses will decrease by 126.09% and directly turn into a negative value.

In fact, since 2022, XGIMI Technology's performance has shown signs of decline. The once popular projectors are no longer as "easy to sell" as before. At the same time, cheaper projection products are becoming more and more popular among consumers.

Regarding the performance in the first half of the year, Xgimi Technology stated that consumer demand in the domestic projection market is still under pressure, and affected by the destocking of some old products, the company's sales gross profit margin has declined year-on-year, which in turn led to a year-on-year decline in net profit.

In order to improve the company's performance, Xgimi Technology revealed that the company will optimize resource allocation, promote continuous improvement of revenue structure and gross profit margin, launch more differentiated and market-competitive products in the domestic and overseas markets, and continue to promote refined management and daily operations to reduce costs and increase efficiency, and improve operational efficiency.

Looking back at the development of XGIMI Technology, it took only a few years for it to become the leading player in the domestic projection industry. During this period, XGIMI Technology, which entered the capital market in 2021, also sent its founder Zhong Bo to the Hurun Rich List of that year.

However, Zhong Bo's name "disappeared" from the list of the rich the following year, which was directly related to the sluggish stock price of Xgimi Technology. Compared with the high point of 626.68 yuan, the latest stock price of Xgimi Technology has fallen by about 90%. Baidu Capital, which was the early "financial backer" of Xgimi Technology, has also been reducing its holdings recently.

XGIMI Technology once again delivered disappointing results, with net profit expected to drop by 96% in the first half of the year

On July 27, XGIMI Technology, which has the halo of "the first smart projector stock" in the A-share market, released its semi-annual performance forecast for 2024. The announcement showed that according to preliminary calculations by the company's financial department, XGIMI Technology expects to achieve a net profit of 3.6731 million yuan attributable to the parent company's owners in the first half of the year.

In the same period last year, the net profit attributable to the parent company of XGIMI Technology was 92.7273 million yuan. In comparison, the net profit attributable to the parent company of XGIMI Technology in the first half of this year will decrease by 89.0543 million yuan, a decrease of 96.04%.

If non-recurring gains and losses are deducted, the net profit attributable to the parent company's owners will directly turn negative, recording a loss of 15.2683 million yuan in the first half of the year. Compared with the profit scale of 58.5182 million yuan in the same period last year, it will be a decrease of 73.7865 million yuan, a decrease of 126.09%.

Radar Finance noticed that in fact, as early as 2022, XGIMI Technology's performance had already shown signs of decline. In the previous period from 2018 to 2021, XGIMI Technology's revenue growth rate has always maintained a double-digit level. From 2019 to 2021, XGIMI Technology's net profit attributable to shareholders of listed companies has also risen from more than 90 million yuan at the beginning to 483 million yuan, with an annual growth rate of up to 881.43% and a minimum of 79.87%.

But by 2022, the growth rates of Xgimi Technology's revenue and net profit attributable to shareholders of listed companies both dropped to single digits. Last year, Xgimi Technology's two operating indicators failed to maintain growth. In 2023, Xgimi Technology recorded revenue of 3.557 billion yuan, a decrease of 15.77% from the revenue of 4.222 billion yuan in 2022; in terms of profit, last year Xgimi Technology's net profit attributable to shareholders of listed companies was 121 million yuan, a decrease of 75.97% from 501 million yuan in the previous year.

At that time, when mentioning the decline in performance, the reason given by Xgimi Technology was that the company's product sales volume declined to a certain extent during the reporting period. At the same time, the company lowered the sales prices of some products, resulting in a decline in the company's sales revenue and gross profit margin.

At the same time, during the reporting period, the company continued to invest R&D resources in new product development and technology reserves. The amount of R&D investment was similar to that of the same period last year, and sales expenses and administrative expenses increased slightly. The above reasons combined led to the company's net profit attributable to shareholders of listed companies in 2023 and the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses. The decline exceeded the decline in revenue.

In fact, the reason behind the pressure on XGIMI Technology's performance is the slow recovery of consumer demand in the domestic projection market. Compared with the past, projectors are indeed not so "easy to sell". According to IDC data, the total shipments of China's projector market in 2023 will be 4.736 million units, a year-on-year decrease of 6.2%, and sales will be 14.77 billion yuan, a year-on-year decrease of 25.6%.

Faced with the report card of the profit index in the first half of this year, which took a sharp turn for the worse, XGIMI Technology once again made a summary and reflection. XGIMI Technology stated that in the first half of this year, affected by the macroeconomic environment and other factors, the consumer demand in the domestic projection market was still under pressure. Affected by the destocking of some old products, the company's sales gross profit margin during the reporting period decreased compared with the same period last year, resulting in a year-on-year decline in the company's net profit and a negative net profit after deducting non-recurring gains and losses.

To solve the dilemma, XGIMI plays two cards: low price and going overseas

On the company's official website, Xgimi Technology describes itself as a high-tech scientific and technological enterprise that focuses on the new display field, focusing on creating innovative products such as smart projectors and laser TVs, and integrating design, R&D, manufacturing, sales and services.

Radar Finance learned that the main products and services of XGIMI Technology currently include smart projection products, projection-related accessories and Internet value-added services. From the company's revenue structure, XGIMI Technology is highly dependent on complete projection products. Last year, complete projection products contributed 3.212 billion yuan in revenue to XGIMI Technology, accounting for more than 90% of the total revenue.

Although accessory products and Internet value-added services generated revenues of 170 million yuan and 148 million yuan for the company respectively last year, and achieved year-on-year growth of 8.61% and 53.1%, the combined contribution of the above two sectors to the company's total revenue was less than 10%.

If we further break down the projector products, we can see that the sales revenue of this segment of XGIMI Technology is mainly from telephoto projection. Last year, XGIMI Technology earned 2.874 billion yuan in revenue from the sales of telephoto projection products, accounting for 80.8% of the company's total operating income.

However, the overall demand in the domestic projection market was under pressure in 2023, and the sales of telephoto projectors under XGIMI Technology declined. Last year, the sales volume of XGIMI Technology's telephoto projector products was 943,899 units, a decrease of 13.64% from the previous year, which led to a year-on-year decrease of 21.54% in the company's revenue from this product.

At the same time, as the company adjusted the prices of some telephoto projection products, the gross profit margin indicator of this product segment also declined, down 8.08 percentage points year-on-year to 26.31%. The company's overall sales gross profit margin dropped from 35.98% in 2022 to 31.25% in 2023, and further dropped to 28.05% in the first quarter of this year.

Faced with various difficulties, XGIMI Technology had to find ways to "save itself". On the one hand, XGIMI Technology tried to seize the market at different price points and launched new products in different price ranges such as high-end, mid-range and entry-level products to meet the diverse needs of consumers in different scenarios and price ranges.

In its latest research report, GF Securities pointed out that the overall smart projection industry was under pressure in the first half of 24H1, and products below 2,000 yuan became the main source of growth. According to data from Loto Technology, the sales volume of China's smart projection omni-channel market in the first half of 24H1 was 2.889 million units, a year-on-year increase of 3.5%; sales revenue was 4.76 billion yuan, a year-on-year decrease of 10.2%. At the same time, the driving force for the growth of the market size mainly comes from low-end and mid-end products below 2,000 yuan. According to Loto Technology's online monitoring data, the share of online sales below 2,000 yuan in the first half of 24H1 increased by 12.1pct year-on-year.

According to online monitoring data from Aowei Cloud Network, the retail volume of products priced below 500 yuan accounted for 32.8% of the market in 2023, an increase of 4.5 percentage points year-on-year, and the consumption threshold of the online market continued to decline.

Perhaps it has seen the changes in the industry, and XGIMI Technology has to speed up its layout in the low-price segment. In the first half of this year, XGIMI Technology launched the portable projector Play5, priced at less than 2,000 yuan, and the eye-protection three-color laser gimbal projector RS10 series covering multiple price ranges.

On the other hand, XGIMI Technology has also worked hard to expand its sales channels and set its sights on overseas markets. In fact, since 2019, XGIMI Technology has launched Google-certified products equipped with the Android TV system in overseas markets. As of the end of last year, XGIMI Technology has entered regional markets such as Japan, Europe, and the United States.

According to Xgimi Technology, in the first half of this year, the company's overseas revenue growth drove the proportion of overseas revenue to continue to increase, which promoted the month-on-month improvement in sales gross profit margin in the second quarter, while offsetting the impact of weak domestic demand on overall revenue. In the first half of 2024, the company's overall revenue scale was basically the same as the same period last year.

It is worth noting that by the end of last year, XGIMI Technology had a total of 664 R&D personnel, 30 fewer than the previous year's 694. Among these 664 R&D personnel, 4 had doctoral degrees, 150 had master's degrees, 424 had bachelor's degrees, 78 had junior college degrees, and 8 had high school degrees or below.

Although the number of R&D personnel has decreased, the proportion of R&D personnel in XGIMI Technology to all employees has increased from 26.34% in 2022 to 27.12% last year. This is mainly because the total number of employees in XGIMI Technology was reduced by a larger scale last year, from 2,635 in 2022 to 2,448 last year, a year-on-year decrease of 187.

Among them, the number of production staff of XGIMI Technology decreased from 913 in 2022 to 685. Unlike the reduction in the number of R&D and production staff, the number of sales staff of XGIMI Technology increased from 792 in 2022 to 877 last year. However, judging from the changes in the company's revenue last year, the expansion of the sales staff of XGIMI Technology does not seem to have brought significant performance growth.

The stock price fell 90% from its peak, and the founder fell out of the Hurun Rich List

In the domestic smart projection industry, XGIMI Technology is considered a leading player in the field. According to data from IDC cited by XGIMI Technology's official website, since breaking the monopoly of foreign brands in the Chinese projector market in 2018, XGIMI has ranked first in shipments for five and a half consecutive years, and ranked first in both shipments and sales for three and a half consecutive years, widening the gap with its followers.

In 2023, the total shipment volume of China's projection equipment market reached 4.736 million units, and the top five brands in terms of shipment volume were XGIMI, JMGO, Epson, Fengmi and Dangbei. Among all the brands, XGIMI took the lead.

The founder of the XGIMI Technology brand is Zhong Bo, a post-80s entrepreneur born in Zigong City, Sichuan Province. In 2003, Zhong Bo graduated from the University of Electronic Science and Technology of China. After graduation, Zhong Bo worked in many companies. From July 2003 to July 2004, Zhong Bo worked as an engineer at Hisense TV Research Institute.

After that, Zhong Bo jumped to Morningstar Software R&D (Shenzhen) Co., Ltd., where he served as the company's R&D engineer and Southwest Region Technical Director. During his tenure, Zhong Bo was mainly responsible for the company's R&D projects for dozens of LCD models including TCL, Skyworth, Changhong, Konka, Xiahua, and BenQ.

However, Zhong Bo was not satisfied with the status quo. He was ambitious and longed for a bigger stage and challenge. In 2012, Zhong Bo made a bold decision. He resolutely quit his well-paid job and started his own entrepreneurial journey. Against this background, XGIMI Technology was officially launched in Chengdu.

Under the leadership of Zhong Bo, XGIMI Technology has experienced rapid development. According to a report released by IDC in December 2018, in the first three quarters of that year, XGIMI Technology ranked first with a shipment volume of 400,000 units. This was actually the first time that a domestic brand surpassed international giants Epson and Sony in the Chinese projector market. XGIMI Technology ended the 15-year dominance of foreign brands in the Chinese market.

With its outstanding market performance, XGIMI Technology has also frequently won the favor of capital. Tianyancha shows that since its establishment, XGIMI has received 8 rounds of financing, including star investors such as Mango Cultural and Creative Fund, Baidu, and Matrix Partners.

In March 2021, XGIMI Technology was successfully listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange. In the prospectus submitted before the listing, XGIMI Technology mentioned that Zhong Bo, the company's chairman, was the founding shareholder of XGIMI Technology. Since the company was founded, Zhong Bo has been the largest shareholder and core management personnel, and has a significant impact on the company's core technology development, core product research and development, business management, and investor introduction.

It is understood that before the listing, Zhong Bo directly held 25.02% of the shares of XGIMI Technology. At the same time, as the executive partner of XGIMI Consulting and Happy Rice Flower, Zhong Bo controlled 4.16% of the voting rights of the issuer's shares, and directly and indirectly controlled 29.17% of the voting rights of the issuer's shares. Together with the persons acting in concert, Zhong Bo actually controlled 46.34% of the voting rights of XGIMI's shares, which is much higher than other shareholders of the issuer and can control the shareholders' meeting of the issuer.

Thanks to the successful entry of Xgimi Technology into the capital market, Zhong Bo also made it onto the 2021 Hurun Rich List with a wealth of 4.5 billion yuan that year.

However, Zhong Bo's position on the rich list is not solid. Just one year later, Zhong Bo's name could no longer be found on the Hurun Rich List in 2022. Last year, Zhong Bo's name had not reappeared on the Hurun Rich List.

As of the end of the first quarter of this year, Zhong Bo directly held 18.79% of the shares of XGIMI Technology. The reason why Zhong Bo "disappeared" from the rich list was actually related to the "cold eyes" that XGIMI Technology suffered in the capital market.

As of the close of July 29, the share price of XGIMI Technology closed at 62.2 yuan per share, with a latest market value of 4.354 billion yuan. Compared with the beginning of the year, the share price of XGIMI Technology has fallen by 44.8% this year. Compared with the highest point of 614.33 yuan, the share price of XGIMI Technology has fallen by about 90%.

It is worth noting that Baidu, as an early investor in the company, has been reducing its stake in Xgimi Technology recently. At the beginning of the company's listing, Baidu Netcom and its joint actor Baidu Biwei held a combined 15.48% stake in Xgimi Technology, second only to Zhong Bo, and were the company's second largest shareholder. However, as of June 17, Baidu Netcom's shareholding had dropped to 5.04%, and Baidu Biwei's shareholding had dropped to 0.49%. Based on this calculation, the combined shareholding ratio of the two has dropped to 5.53%.

Some analysts believe that the decline in XGIMI Technology's performance is due to a number of factors, including slowing industry growth, intensified market competition, and low-end products taking over the market. The revenue model is more dependent on complete projection products, which, to a certain extent, limits XGIMI Technology's imagination and development space.