Capital association news on October 21 (Reporter: Huang Lu): The consumer electronics industry entered the traditional peak season in the second half of the year, with Lens Technology (300433.SZ) achieving double growth in revenue and net income in the first three quarters. Industry insiders told Capital Association reporters that this year, flagship phones will be intensively released in Q4, and the integration of AI applications will strengthen this round of smartphone replacement cycle, with the prosperity of the industry chain expected to continue to improve.

Lens Technology announced yesterday evening that in the first three quarters of this year, the company achieved revenue of 46.228 billion yuan, a year-on-year increase of 36.74%; the net profit attributable to the shareholders of the listed company was 2.371 billion yuan, a year-on-year increase of 43.74%. Among them, the company achieved a net profit of 1.51 billion yuan in the third quarter, a year-on-year increase of 37.85%. Lens Technology stated that the revenue growth is mainly due to the increase in consumer electronics business income.

The financial report shows that the company's operating costs in the first three quarters of this year increased by 38.46%, slightly higher than the revenue growth rate for the same period. Previously, Lens Technology revealed during institutional research that in the first half of the year, the new production capacity at Changsha Lens' Huanghua production base was put into operation. Due to the establishment of a new factory and new team requiring a period of adjustment, and additional costs incurred in the early stage for customer collaboration on R&D and sampling, the new products had a lower yield level in the initial mass production stage, leading to higher overall costs. Subsequently, with the gradual improvement in yield rate, the business data will also continue to improve.

The domestic leading manufacturers in the mobile phone supply chain include component manufacturers Luxshare Precision Industry (002475.SZ), Avary Holding (002938.SZ), and Lens Technology. In the AR and foldable screen fields, manufacturers include Goertek Inc. (002241.SZ) and Suzhou Dongshan Precision Manufacturing (002384.SZ).

Since the third quarter, the consumer electronics sector has entered the peak consumption season. Public information shows that Lens Technology started recruiting personnel as early as June, with recruitment completed in July. The company has ample orders on hand, and all sectors are operating at full capacity. Avary Holding also stated during a previous research session that in the second half of the year, the company has entered the traditional peak production season. Monthly revenue in July showed good growth, and all production lines of the company are also running at full capacity. With the launch of new products by customers in the second half of the year, it is expected that the company's profitability will return to a good level.

According to market research firm TechInsights analysis, it is expected that the shipment volume of the Apple iPhone 16 series will exceed that of its predecessors, with a projected global shipment volume of 73 million units in 2024. Among them, the iPhone 16 Pro Max is expected to become the best-selling model in the iPhone 16 series, accounting for 35% of total sales. In addition, flagship Android phones of various major brands will also be intensively released in the fourth quarter.

Lens Technology is one of the core companies in Apple's supply chain, providing Apple with glass cover plates, sapphire camera lenses, ceramic structural components, metal mid-frames, and other external appearance and module products. Industry insiders told Capital Association reporters that since the beginning of this year, the consumer electronics industry has been continuously innovating. AI will first be applied to mature consumer electronics products such as smartphones, posing higher requirements on the hardware end, resulting in changes in appearance and structural components, as well as core components such as UTG and CPI required for foldable screens. AI applications might strengthen this round of phone replacement cycle, benefiting companies related to the industry chain.