(Yicai Global) July 13 -- Shares of Oflim Group slumped after the Chinese component maker said its net profit was slashed by as much as 94 percent in the first half. The profit decline is caused by waning or terminated contracts with Apple and Huawei Technologies, according to insiders.

Ofilm's stock price [SHE:002456] fell as much as 5.6 percent to CNY8.29 (USD1.30) intraday. The shares have declined almost 40 percent in value this year.

Net profit may fall between 90 percent and 94 percent to a point between CNY32 million and CNY48 million (as low as USD4.9 million), the Shenzhen-based firm said in a statement yesterday.

The slump is caused by a "specific overseas client" that terminated its procurement contract, said the company. That client is Apple, according to industry insiders. Last March, Ofilm said it is no longer receiving orders from Apple for its camera module-related products.

Moreover, a chip embargo and other restrictive measures imposed on another client known as "H" resulted in a big annual decrease in sales of various products, Oflim added. Market participants widely believe that "H" refers to Huawei even though Oflim didn't disclose the full name.

This year, Shenzhen-based Huawei dropped out of the world's top five smartphone vendors based on shipments. The telecoms equipment giant was included in the US government's Entity List in May 2019, which prohibits it from buying US-made technologies.

Ofilm is expanding its optical and photoelectric product business in the areas of virtual and augmented reality, drones, security, medical care, and sports cameras, it said. However, that adds to its expenditures, it added.

Founded in 2002, Oflim engages in business in the fields of camera modules, optical lenses, and microelectronics.

Editor: Emmi Laine, Xiao Yi