Appotronics posts RMB2.54 b in 2022, operating cash flow leaping 204%

SHENZHEN, China, June 26, 2023 /PRNewswire/ — China-based Appotronics Corporation Limited (“Appotronics”, 688007.SH) released its 2022 financial report, recording RMB2.54billion in revenue, up 1.72% year-on-year (YOY), alongside RMB119 million net profit attributable to shareholders of parent company and RMB65 million net profit after extraordinary gains and losses. Highlighted was its net cash flow generated from operating activities, which reached RMB177 million, up 204% YOY.

The year of 2022 saw Appotronics continue its stead growth, especially in the automotive optics field, another potential growth point for the company. Meanwhile, its core household equipment business was growing rapidly, and the proportion of C-end proprietary brand revenue continued to increase. Despite the significant disruptions caused by the COVID-19 pandemic, the cinema business and professional display business remained resilient, with a solid business foundation and opening up new prospects in overseas business.

Regarding the company’s development plan for 2023, Li Yi, founder, chairman and CEO of Appotronics, stated in a letter to shareholders that in the past year, Appotronics maintained strategic focus, demonstrated operational resilience, and verified the correctness of the strategy. The company always adheres to the principle of establishment with technological innovation, applying core technologies and components to different scenarios and making roads into one market segment and another, full of infinite imagination. The company, always believing that technological innovation is the source of enterprise development and true core competitiveness, will double down on the research and development (R&D) this year, ramp up operation and management, and shore up the automotive optics business, unwaveringly moving forward towards strategic goals.

Automotive optics biz on full speed

During the period, Appotronics achieved breakthrough progress in its automotive optics business, opening up new growth opportunities for the company and even the industry. A new entrant to the automotive industry, Appotronics, with its years of deep accumulation in the field of optics, has quickly completed the definitive implementation of its automotive optics business. In just one year, the company obtained the IATF 16949:2016 international automobile quality management system certification and got designated by BYD, an international car company, and SERES among others.

At the 20th Shanghai International Automobile Industry Exhibition, Appotronics launched automobile-grade colored laser headlights, alongside immersive in-car digital interaction solutions such as exterior window displays, in-car transparent displays, rollable large screen projection, and smart surface displays. At the 2023 International Consumer Electronics Show (CES) in the United States, BMW presented its i Vision Dee, a globally debuted concept car equipped with Appotronics’s core components of its four window fusion display.

According to the report, Appotronics, sensing the opportunities brought by the trend of automotive intelligence in automotive optics, has spared no effort to develop three major product lines: automotive displays, laser headlights, and HUD, and launched multiple solutions leveraging the advantages of the ALPD® laser display technology such as small size, high brightness, and seamless display. At the same time, the company attaches great importance to the layout of automotive optical technology patents. During the period, there were 81 new authorizations and patent applications related to automotive optical technology, up 326.32% YOY; the cumulative number of authorized and applied patents was 148, up 82.72% YOY.

The market value of intelligent cabins globally is projected to be USD68.1 billion, with China in excess of RMB160 billion, according to IHS; The market share of China’s intelligent cabins will leap to 37%, the country becoming the main global market for intelligent cabin consumption. TrendForce predicts that ADB’s headlamp market penetration rate is expected to reach 13.2% by 2026, driving the overall lamp market value to USD39.496 billion in 2026, with a compound annual growth rate of 4.7% from 2021 to 2026. Hua Chuang Securities believes that the Appotronics is on the verge of established business presence in the field of in-automotive projects, having been designated by domestic and foreign car companies, driving the growth of long-term in-automotive business.

Highlighting business resilience

The core equipment business and C-end proprietary brand business have developed rapidly despite macroeconomic pressure. Cinema screening services and professional display businesses have shown strong resilience, continuing to lead the pack domestically in terms of market share, with market advantages consolidated.

The report indicates that Appotronics accelerated its layout of the To C core device business, with an overall operating revenue of RMB 413 million in the household core device business, up nearly 70% YOY. The subsidiary Formovie continued to develop word-of-mouth products, releasing multiple intelligent projectors. Its own brand business grew by over 36% YOY, making up around 66% of its total revenue. According to IDC data, the shipment volume of Formovie’s own projector brands(excluding ODM) jumped 100.4% YOY, with a market share of 8% and ranking third in terms of domestic consumer projector market shipment in 2022.

When it comes to the engineering laser and business education laser markets, Appotronics maintained its dominant position, having launched multiple representative projects. The overseas specialized display business performed particularly well, covering some markets in North America, East Asia, and Central Asia. In terms of cinemas, nearly 2700 new laser movie light sources were installed nationwide, with a cumulative installation volume in excess of 27700 units. Technology has been used to help save energy and electricity by the company, becoming a model in the industry in response to the “dual carbon” strategy.

Maintain technological leadership and promote high-quality development 

Technological innovation is the best way for high-quality development of science and technology innovation enterprises. During the period, Appotronics doubled down on the R&D and actively promoted the translation of R&D achievements, strong momentum for the company’s long-term healthy development.

According to the report, Appotronics’s R&D investment in 2022 reached RMB262 million, up 10.73% YOY; the proportion of R&D investment was 10.31%, an increase of 0.84 percentage points compared with last year. Meanwhile, the company continued to expand its R&D team, with a total of 521 R&D personnel, accounting for 31.83% of the company’s total workforce. As of December 31, 2022, the company accumulated a total of 2629 patent applications and authorized patents worldwide, among which were 1773 authorized patents, including 966 authorized invention patents.

Correspondingly, during the period, Appotronics achieved multiple technological breakthroughs. Specifically, in May 2022, the company launched self-developed pocket AR commercial optical module with a PPI in excess of 10000, which entered the stage of small-scale supply, having made a breakthrough in the underlying technical architecture and a significant progress in high pixel density.

In June 2022, Midea officially launched its first home service robot, featuring AI butler, home assistant, safety guard, and technology playmate and integrating Appotronics’s ALPD ® laser projection core device. Going forward, with the rapid development of artificial intelligence technology represented by chatGPT, the core components of Appotronics are expected to serve as better support platforms.

In November 2022, Appotronics released ALPD® 5.0 laser display technology, which significantly increases the color gamut range and achieves the maximum visible color gamut for the human eye, thereby improving the visual experience while maintaining speckle-free, low-cost, and high-light efficiency.

The first quarter of 2023 alone saw Appotronics’s R&D investment jump 15.49% YOY. Meanwhile, the Company is making a synergistic effort to ramp up development quality.  Li Yi said, “This year, we will continue to strengthen the Company’s operation and management. We will show the determination and courage to fight a protracted battle, go all out to do a good job in the Company’s management, and enhance the Company’s intrinsic value. Especially in terms of making up for shortcomings, we will never give up until the goal is achieved, and improve the Company’s engineering and manufacturing capabilities; deepen supply chain reform; establish and improve the Company’s various mechanisms and processes; conduct more rigorous internal control audits… firmly following the path of high-quality development.”

Li Yi stated that nothing will affect Appotronics’s long-term strategy, be it short-term performance swings or share price fluctuations. The company, a technology company with high growth potential, sees a bright future ahead, with tomorrow in its hands.