By PANG Yu
In Q1, OFilm Group, the optical and optoelectronic components manufacturer that once was a supplier of Apple, lost 360 million yuan, which turned around in Q2 into a profit of 4.4 million yuan.
However, despite the turnaround in net profit, adjusted net profit remains in negative territory, with losses of 570 million yuan for the year so far. That makes nine consecutive quarters.
It's down to reduced demand, plus all the usual suspects, chips, supply chains and exchange rates.
Nevertheless, OFilm has been doing badly for some years now, and overall profitability and performance are showing signs of improvement, basically down to cost-cutting.
OFilm's main business segment has always been phones, but smart cars have emerged as a key growth area. Since 2020, revenue from smart car products has grown substantially, accounting for about 10 percent of revenue as of the first half of 2022.
Despite the growth in smart cars, OFilm's optical lenses and optical image modules, as well as microelectronics, have experienced rapid declines. While the progress in the smart car sector is promising, it has not yet offset the declines witnessed in the main business.
In September 2020, OFilm was removed by Apple from its supplier list, and OFilm's performance plummeted drastically. The decline in revenue, coupled with substantial asset impairment losses, led the company to incur huge losses for three consecutive years. In 2020, 2021, and 2022, the net profits were losses of 1.95 billion yuan, 2.62 billion yuan, and 5.18 billion yuan, respectively.
