Upcoming IPO Outlook | The leading optical module company in consumer electronics sees a surge in performance, yet Li Jing Innovation, with its imperfections, conceals multiple discount factors.

As the process of going public in Hong Kong continues to advance, Lijing Innovation Technology Co., Ltd. (hereinafter referred to as Lijing Innovation) is expected to become the second publicly listed platform for the Wang family. In 2018, Luxshare Precision Industry (002475.SZ), controlled by siblings Wang Laichun and Wang Laisheng, saw its share of AirPods manufacturing rise to approximately 50%. The company also made significant inroads into LCP antennas, wireless charging receivers, and linear motors for three new Apple product modules, resulting in a performance growth rate that reached a high since its IPO, solidifying its position as the "leader in the fruit chain module" space. Also in that year, Wang Laixi (younger brother of Wang Laichun), who had worked at Luxshare Precision Industry for 14 years and served as the General Manager, left to establish Lijing Innovation. Wang Laichun, the Chairman of Luxshare Precision Industry, personally took on the role of Non-Executive Director and Chairman of Lijing Innovation. Lijing Innovation, founded by Wang Laixi, focuses on camera modules, optical lenses, and the XR optical track, creating a business divide in the value chain compared to Luxshare Precision Industry, which is engaged in connectors, acoustics, and overall machine assembly. Relying on the supply chain and management DNA of Luxshare Precision Industry, the Wang family aims to separately capitalize the "fruit chain optics" asset and will push for Lijing Innovation's first submission to the Hong Kong Stock Exchange in November 2025. It is reported that after the initial submission to the Hong Kong Stock Exchange on November 28, 2025, Lijing Innovation submitted a second listing application to the Hong Kong Stock Exchange Main Board on July 31, 2026, with CITIC SEC and CICC (China International Capital Corporation Hong Kong) as joint sponsors. According to Frost & Sullivan data, based on revenues in 2025, Lijing Innovation ranks second globally in the consumer electronics camera module field, first in China for mid-to-high-end smartphone camera modules, and holds the top position globally in the camera module field for laptops and tablets. The leading market share has translated into sustained growth momentum. The prospectus indicates that Lijing Innovation's revenues from 2023 to 2025 are projected to be approximately 15.248 billion, 27.914 billion, and 34.755 billion yuan, with a compound annual growth rate (CAGR) of 50.97%. During the same period, net profits are estimated at 588 million, 1.052 billion, and 1.690 billion yuan, with a CAGR of 69.53%. In the first five months of 2026, Lijing Innovation's revenue reached approximately 13.624 billion yuan, representing a year-on-year growth of 14.67%. The net profit for the period was 776 million yuan, up 48.5%, continuing to show rapid growth. Consumer electronics are becoming the core growth engine, while the automotive electronics business continues to decline. The development history of Lijing Innovation essentially represents a line of merger and expansion that the Wang family has replicated in the optical domain using a "Luxshare-style approach." In March 2018, Wang Laixi established Lijing Innovation in Huangpu, Guangzhou, and in the same month, acquired the camera module (CCM) division of Lite-On Technology for USD 360 million, securing mature production lines, patents, and customer resources. Within the same year, the company produced the industry's first smartphone triple-camera module, completing its jump from 0 to 1. The real turning point came from breakthroughs on Apple's sideIn December 2020, Lijing Innovation acquired a 44.87% stake in COWELL for HKD 2.196 billion, increasing its stake to approximately 73.88% by June 2022. This allowed Lijing Innovation to enter the core supply chain of iPhone camera modules as a supplier of COWELL, achieving dual-ecosystem coverage for Android and iOS. By December 2022, Lijing Innovation further acquired Lite-On Group's imaging division to complement its offerings in smart office optical components like printers and scanners. In 2025, the company completed the acquisition of Konica Minolta's Shanghai plant, extending its capabilities upstream into high-end optical lenses and automotive lenses, and formed a joint venture with ROBOSENSE to produce laser radar modules in Dongguan. Through internal self-development and organizational growth, combined with external mergers and strategic collaborations, Lijing Innovation rapidly transformed from a vendor focused solely on camera modules and smartphone scenarios into a provider of precise optical solutions covering multiple fields, including consumer electronics, automotive electronics, smart offices, Siasun robots and automation, XR smart terminals, smart glasses, new displays, smart homes, and new industrial applications. According to the prospectus, the sustained growth of Lijing Innovation's revenue from 2023 to 2025 mainly stems from two aspects. Firstly, the consumer electronics business, serving as the company's "ballast," achieved leapfrog growth driven by a simultaneous rise in volume and price, with revenues increasing from 11.919 billion yuan to 31.276 billion yuan. Its contribution to total revenue rose from 78.2% to 90%, becoming the absolute main driver of overall revenue growth. Secondly, although emerging fields and other businesses accounted for only about 3% of total revenue, their income surged from 578 million yuan to 1.061 billion yuan, effectively supplementing overall growth due to high growth rates. In contrast, automotive electronics experienced fluctuations in revenue due to "increased volume but decreased prices," and smart office applications faced income volatility due to "decreased volume and price changes." In the first five months of 2026, the company's revenue growth logic transitioned to resonate across multiple businesses. Consumer electronics continued to serve as the growth engine under the dual benefits of "increased volume and higher prices," while smart office applications, despite facing a decline in average product prices, managed to generate year-on-year revenue growth through expanded sales. Emerging fields and other businesses also recorded increases as products accelerated their market penetration. However, automotive electronics exhibited a "volume increase but price decline" pattern, as weaker prices negated shipping growth, leading to a slight revenue decline for this segment and a slight drag on overall performance. Thus, it is evident that Lijing Innovation's current automotive electronics business faces potential challenges due to continuously weakening product prices. It is noteworthy that between 2023 and 2025, as well as in the first five months of 2026, Lijing Innovation's profit growth rate consistently outperformed its revenue growth. The core driver of this performance was a systemic enhancement in operational management efficiency. From an expenditure perspective, the company's three major expense ratios to revenue declined from 7.51% in 2023 to 4.81% in the first five months of 2026, showing a clear downward trend. This improvement largely results from the convergence of administrative and R&D expenditure ratios, enhancing the cost structure directly amplified operational leverage and accelerated profit release. However, Lijing Innovation's long-term low R&D intensity presents an overlooked potential risk. During the reporting period, R&D expenditure as a percentage of revenue fell from 5.30% to 3.36%. Although this smoothened and beautified profit performance in the short term, it still appears weak compared to industry peers. Viewed from a long-term perspective, lower R&D investment could hinder the pace of technological iteration and weaken the company's future product competitiveness and growth ceiling. The leading premium added to the industry's beta is a significant advantage, yet multiple discount factors should not be ignored. From an industry perspective, the global consumer electronics precision optical solutions market is expected to experience accelerated growth. According to Frost & Sullivan data, the market size for global consumer electronics precision optical solutions is projected to grow from USD 79.6 billion in 2021 to USD 86.9 billion in 2025, with a compound annual growth rate of 2.2%. Driven by upgrades in imaging experiences and the expansion of optical innovations in smart consumer electronics, Frost & Sullivan forecasts that by 2030, this market size will reach USD 124.9 billion, with a compound annual growth rate of 9.9% between 2026 and 2030, significantly elevating the industry's growth rate compared to the previous five years. Among these, AI has become a core driver of growth in the global consumer electronics precision optical solutions market. With rapid increases in the shipment volumes of AI smartphones, AI tablets, and AI laptops, optical modules have been endowed with enhanced capabilities in computational photography, intelligent perception, and immersive interaction, driving simultaneous increases in market value and technological complexity for optical demand. Based on this, Frost & Sullivan estimates that from 2026 to 2030, the global precision optical solutions market for AI consumer electronics will reach approximately USD 94.2 billion, with an annual growth rate as high as 27.3%. As a global leader in consumer electronics camera modules, Lijing Innovation is positioned to naturally benefit from the industry's accelerated expansion. It is expected that as performance continues to materialize, the company will further consolidate its leading positionthis combination of leading premium and industry beta is a notable advantage for Lijing Innovation. Nonetheless, investors should not overlook the potential risks and challenges facing Lijing Innovation in its business operations. The first major risk is the mutual concentration of both customers and suppliers, which is the most apparent structural risk for Lijing Innovation. From 2023 to the first five months of 2026, the revenue share of the top five customers of Lijing Innovation were 77.9%, 88.7%, 90%, and 90.1%, indicating a continuous rise in customer concentration; notably, revenue from the largest customer accounted for 39.9%, 61.6%, 71%, and 68.2%, increasingly dependent on a single major customer (widely expected to be Apple). During the same period, Lijing Innovation's procurement amounts from the top five suppliers constituted 41.9%, 56.5%, 62.1%, and 62.5% respectively, with procurement from the largest supplier (also widely expected to be Apple) accounting for approximately 20.7%, 36.5%, 48.5%, and 47.3%. This "dual-edged sword" of being both a customer and supplier means that both order pricing power and procurement negotiation power are held in the same hands: customer order cuts directly impact revenue, while changes in customer supply policies directly affect costs. Under this dual resonance, performance volatility may experience significant fluctuations. Secondly, the company's business structure reflects a significant single-polar dependence. Despite Lijing Innovation's expansion into multiple tracks such as automotive electronics, smart offices, and emerging fields, consumer electronics still accounted for a high 90% of revenue by 2025, with the other segments collectively making up less than 10%. The new businesses have yet to effectively take the baton. In this "monopoly" structure, any cyclical retraction in demand from consumer electronics, customer order adjustments, or price declines will directly amplify as severe fluctuations in overall performance due to their high weights. Moreover, the quality risks on the asset side are also challenges that Lijing Innovation cannot avoid, rooted in the efficiency loss and capital accumulation stemming from a heavy asset expansion model. Based on fixed assets, the company's capacity utilization has long remained underutilizedconsumer electronics production lines reported a peak utilization of only 73.7%, while automotive electronics have long hovered around 40%. The underutilization led to a one-time impairment of 351 million yuan for properties, plants, and equipment in 2024 due to anticipated order reductions. Complicating matters further is the nearly 2 billion yuan of goodwill resulting from historical mergers. If the performance of the acquired business units fails to meet expectations, the impairment provision will directly impact the current profit and loss statement. On the operational capital front, the sales structure dominated by major clients leads to high accounts receivable; at the end of 2025, trade receivables (net of provisions) reached 7.5 billion yuan, remaining around 6 billion yuan even in the first five months of 2026. This huge accounts receivable balance not only harbors bad debt risks but is also a direct reflection of the company's weak bargaining power in the industrial chain: if major customers delay payments, it will directly squeeze the company's cash flow. In summary, the continuous release of industry dividends, the positioning advantages of a global leader, and steady performance realizations collectively support the underlying narrative for Lijing Innovation's upcoming IPO in Hong Kong. However, the dual lock on customers and suppliers, the single-polar dependence of the revenue structure on consumer electronics, combined with nearly 2 billion yuan of goodwill and high trade receivables, which imply concerns over asset quality, may be key discount factors that suppress its valuation for issuance.