Source: Interface News

Interface News reporter Fang Shiqi

Interface News Editor: Wen Shuqi

After the projector business is cold, XGIMI Technology is actively betting on the vehicle projection business.

On October 16, XGIMI Technology (688696. SH) announced that its wholly-owned subsidiary, Yibin XGIMI Optoelectronics Co., Ltd., recently received a notice of designation for the development of BAIC New Energy, and will become the designated supplier of BAIC New Energy's on-board projectors and screen assemblies to supply intelligent cockpit display products for its new models.

In addition, Yibin XGIMI also received a notice from another well-known domestic automobile industry chain enterprise that it needs to complete the approval of the company's supplier system access before it can be officially fixed.

It is understood that the development fixed-point notice generally refers to an official document issued by the automobile manufacturer (customer) to the supplier in the automotive industry to confirm that the supplier has been selected as the product supplier of a specific model or project.

This usually means that the supplier's product has passed the technical review and business negotiation of the car company, and the two parties have reached a preliminary agreement on the key terms of the product, such as technical specifications, quality requirements, price, and delivery time, and the two parties have entered the state of performance.

However, the development of the fixed-point notice does not constitute a substantive order, nor does it mean that the two parties have fully performed the contract, and there are still many variables in the meantime. XGIMI Technology also reminded in the announcement that in the process of order fulfillment, there may be project changes, suspension or termination due to various reasons such as product development obstruction and substandard supply quality.

The projector market has been sluggish in the past two years,Even if it is a leading enterprise in the industry like XGIMI Technology,It is difficult to stand alone。 The financial report shows that in 2023, XGIMI Technology's revenue and net profit will decrease by 15.77% and 76.09% year-on-year respectively. In the first half of this year, XGIMI Technology's performance plummeted again, with revenue and net profit decreasing by 1.66% and 95.83% year-on-year.

After the domestic home projector business faced a growth bottleneck, XGIMI Technology tried to take overseas business, vehicle and other emerging businesses as new growth points. At present, its overseas business layout has achieved initial results, and has achieved double-digit growth year after year since 2020. In the first half of this year, overseas revenue increased by 27.95% year-on-year to 448 million yuan, accounting for 27.98% of XGIMI Technology's total revenue, which to a certain extent made up for the loss of 10.31% year-on-year decrease in domestic revenue.

The interface news reporter noticed that XGIMI Technology's start to lay out the on-board business can be traced back to 2021 at the earliest. At that time,Xiaopeng Motors announced at the press conference of the new carP5,This model has an optional on-board solution for XGIMI home intelligent projection products。 At that time, XGIMI was only in the stage of concern about on-board projection technology.

In 2023, XGIMI will begin to accelerate the layout of the on-board business, during which the on-board business has also made some substantial progress. According to the annual report of the same year, Yibin XGIMI has obtained the IATF 16949 automotive industry quality management system compliance certification. In the past research and development of projection products, XGIMI has carried out more technical reserves and patent layouts in the fields of optical design, environmental perception, and human-computer interaction, providing a technical foundation for its transformation into vehicle projection business. As of the first half of 2024, XGIMI has 1090 patents, including 370 invention patents, and there are many patented technologies used in vehicle projection.

At the beginning of 2024, XGIMI Technology will incorporate "vehicle business" into the company's strategic layout, and set up a new vehicle product line division, with Tian Feng, the former head of XGIMI Technology's domestic sales and service center, as the head of the vehicle business department.

On October 16th, XGIMI Technology introduced to the interface news reporter that at present, XGIMI is the only projection enterprise in China that has the ability to develop and produce lenses, optical machines and complete machines at the same time, and has a large-scale manufacturing base covering an area of 280 acres in Yibin, Sichuan. In 2024, XGIMI has completed the establishment of a production line for on-board projection products at this base, and is making every effort to carry out pre-research and production of on-board related products at this stage.

According to the 2024 plan, XGIMI Technology clearly proposed to focus on three core on-board projection scenarios: intelligent cockpit, smart headlights and HUD (head-up display), develop and promote cooperation with domestic and foreign vehicle manufacturers and the upstream and downstream of the on-board industry, and improve the on-board business supply chain system.

It is not difficult to find that doing a good job in the supply chain management of the vehicle business is the top priority of XGIMI Technology. Unlike consumer electronics, XGIMI Technology, which entered the automotive business, needed to establish a new supply chain system to ensure a stable supply of raw materials, components, etc. In addition, XGIMI also needs a lot of time and resources to cultivate partnerships with automakers.

As a new player in the automotive field, XGIMI Technology has limited bargaining power in the upstream and downstream supply chain. However, the whole cycle of on-board products from design and development to market will be relatively long, and a large amount of upfront investment is required, which may cause a lot of pressure on XGIMI's financial situation.

The vehicle projection market is gradually maturing, and its application scenarios have expanded from the initial HUD to car entertainment, smart headlights, window transparent display and other fields, and more companies have begun to pay attention to and invest in this emerging business, including Hisense, Changhong, Guangfeng Technology, Huawei, Spire, etc. Among them, Guangfeng Technology is also a supplier of on-board optical solutions for BAIC New Energy, and also supplies intelligent cockpit display products for new models in Xiangjie, and its fixed-point project has a clear time point, which is expected to be mass-produced and supplied in 2025.

For XGIMI Technology, the overseas projector business has a limited role in driving performance, and the on-board business is still in the development stage, and it is not clear when there will be substantial returns. In the secondary market, XGIMI's share price has fallen by 39% since the beginning of the year.