Zhaochi Shares: Two transformations have been broken, and optical technology drives a new engine of

Transformation has been the main line of action throughout Zhaochi's 20-year development history. From the solid foundation of the TV ODM business, to the in-depth layout of the entire LED industry chain, to the new development of the optical communication track, the two key transformations not only allowed the company to grasp the fire of cutting-edge technology, but also successfully transformed it into profit growth. The core driving force has embarked on a path of high-tech transformation and breakthrough during the industry's pressure period.

Two transformations: From backlight to optical communication, the two transformations of Zhaochi shares closely follow the core thread of optical technology, layout in advance before the arrival of industry trends, avoiding the trap of path dependence.

The first transformation (2011): extending from the terminal to the upstream to build a solid LED foundation In 2011, when the TV ODM business was still the backbone of the company's revenue, Zhaochi shares chose to go against the current and established Zhaochi Optical Unit to cut into LED backlight field. This decision was not blindly advanced. At that time, LED display technology was gradually replacing traditional backlight solutions. The company keenly captured this trend, extended from terminal manufacturing to upstream core links, and finally completed the entire industry chain layout of LED chips, packaging, and applications. This transformation not only freed Zhaochi from its dependence on a single ODM business, but also accumulated profound experience in optical technology, laying the foundation for the subsequent secondary transformation.

The second transformation (2023): Technology translation and opening up a new track for optical communications In 2023, relying on the extensibility advantages of optical technology accumulated in the LED field, Zhaochi Co., Ltd. officially entered the optical communications industry through the acquisition of Zhaochi Ruigu; In December 2024, another 1 billion yuan was added to invest in optical module optical devices and optical communication laser chip projects, completing the cross-border expansion from display optical technology to communication optical technology.

Both transformations require facing Prometheus's dilemma: if the pace of technological upgrades is out of control and if downstream demand is delayed, huge depreciation and price wars may drag down the company's performance. However, the 2025 semi-annual report gave a clear answer. The LED and optical communications industry chain has become a new engine of profit growth, and the transformation has achieved remarkable results.

Transformation is effective: Emerging businesses carry the flag and hedge industry pressure. In the first half of 2025, affected by factors such as changes in global tariff policies, sudden drop in external demand orders, and weak domestic demand, the entire industry is under pressure. Zhaochi's intelligent terminal business (TV ODM) As the main force of traditional revenue, shipments are significantly affected by tariffs. In order to meet the challenges, the company accelerated the release of production capacity in its production base in Vietnam and increased its annual production capacity from 2 million units to 11 million units within six months. Although net profit fell slightly year-on-year due to the increase in short-term operating costs (labor, equipment, logistics premiums), revenue in the second quarter was 4.76 billion yuan, a month-on-month increase of 27.84%. It successfully maintained its overseas market share and built strong barriers for long-term competition.

More importantly, the outstanding performance of the LED and optical communications business marks that the company has broken through the unique dilemma of the industry:

LED business: Double high revenue and profit, becoming the core pillar

In the first half of the year, the LED industry chain achieved revenue of 2.808 billion yuan, a record high in the same period of the previous year, a year-on-year increase of 8.67%; net profit was 403 million yuan, accounting for more than 60% of the profit for the first time. From leading production capacity to leading technology, Zhaochi has continued to make breakthroughs in the LED field: the chip side has overcome vehicle-mounted vertical structure chip technology, and the Mini RGB chip has led the miniaturization trend with a mass production capacity of 0206 mil; the package side has promoted the upgrade of Mini COB backlight technology, and large-scale shipments of vehicles have been achieved; the shipment area in the new display field has doubled year-on-year, and the market share of products with P1.5 and above exceeds 85%. The shipments of international customers have increased rapidly.

Optical communications business: broke in half a year and is expected to turn losses in the second half of the year

As a new business that was established at the end of 2024, optical communication devices and modules have achieved revenue of 309 million yuan in the first half of the year, and the operating side has improved month by month. Business highlights frequently appear: BOSA devices have won long-term orders from head customers, and shipments are expected to reach 100 million devices in 2025, with a market share of 40%; optical modules of 100G and below have been verified by head equipment manufacturers and shipped in batches; the optical chip project was successfully launched on July 16, and it has the mass production capacity of 25G DFB laser chips. In 2026, products with speeds of 50G and above will be launched to target the low-latency transmission needs of data centers.

Transformation closed-loop: Top-level design + business feedback, Shangxia resonance The transformation of Zhaochi shares is not a simple business addition, but a closed-loop system of top-level strategic design + micro-implementation of business units to set the direction at the group level. Each business line innovates and feeds back, forming a transformation synergy of upper and lower resonance.

1. Smart terminal business: Globalization + production capacity upgrade, stabilizing the basics The smart terminal business uses a global layout to cope with tariff challenges: The rapid landing of Vietnam's production base not only alleviates the pressure on overseas order supply, but also promotes the market upgrade company to obtain EU RED network security certification, smart TVs enter the European market in compliance, and the shipping regional structure continues to be optimized, laying the foundation for subsequent overseas expansion.

2. LED industry chain: Technology iteration + application expansion, consolidating its leading position The LED business has shifted from scale expansion to deep technology: the chip side focuses on high-end products (vehicle-mounted, infrared, and new displays) to improve capacity allocation efficiency; the package side uses Mini COB technology to break production capacity dependence, achieving dual leadership in scale and technology; the application side extends from traditional lighting and backlighting to high value-added areas such as vehicle-mounted and ultra-high-definition displays, and continues to broaden the profit boundary.

3. Optical communication business: Technology translation + rapid implementation, copying the successful path of LED The optical communication business fully multiplexes compound semiconductor technology in the LED field (such as GaAs and GaN process homology) to achieve technology translation and cost reduction; at the same time, drawing on the LED business from low-end to high-end, from scale to profit growth path, first open the market with 25G chips, and then break through into high-speed products such as 50G and 100G, quickly completing the transition from entry to profitability.

For Zhaochi, transformation is not a one-time action, but a process of continuous breakthrough. From LEDs to optical communications, the company has always regarded innovation as its gene, breaking path dependence, and cultivating a new growth curve driven by the two-wheel drive of technology and market. Today, the LED business has become a profit pillar, the optical communications business has entered a countdown to harvest, and the intelligent terminal business has stabilized the coordinated efforts of the three basic businesses through globalization, marking that the transformation of Zhaochi shares has entered a harvest period from an investment period. Facing the future, with the implementation of high-end optical communication chips and the expansion of the LED vehicle-mounted and new display markets, the company will continue to focus on optical technology as the core, refresh Zhaochi's answer sheet for high-tech transformation, and provide a replicable transformation model for the industry.