Broker: CGS International
Date of Report: August 29, 2025
Lens Technology: Riding the Next Wave of Apple, EV, and Robotics Growth – An In-Depth Investment Analysis

Introduction: Lens Technology’s Strategic Ascent in Global Tech Supply Chains

Lens Technology (6613 HK) stands at the forefront of precision electronic components manufacturing, rapidly expanding its influence across consumer electronics, smart vehicles, and emerging device segments. With robust partnerships, especially with Apple and Tesla, and a strong pipeline in foldable phones, AR/XR devices, and robotics, Lens Technology is positioned for significant growth. This report provides a comprehensive breakdown of the company’s financials, segment performance, competitive landscape, risks, and ESG initiatives, making it essential reading for institutional investors, market watchers, and analysts.

Lens Technology: Key Investment Highlights and Financial Performance

• Initiated with an Add rating and a target price of HK\$32.00, based on 24x FY26F P/E, reflecting a premium over sector peers due to its leadership in premium components supply.
• Net profit forecasted to soar at a CAGR of 35% in FY24-27F, driven by high-margin orders from Apple, automakers, and new tech devices.
• Revenue set for a 23% CAGR, fueled by share gains in Apple’s supply chain, explosive smart vehicle demand, and rapid adoption in robotics and AR/XR segments.
• Lens Technology’s H shares currently trade at a 20-30% discount to their A-share counterparts.

Lens Technology’s Growth Pillars: Consumer Electronics, Smart Vehicles, Emerging Devices

1. Consumer Electronics: Apple’s Premium Upgrade Cycle Powers Growth

• Lens Tech is a core supplier in Apple’s ecosystem, providing cover glass, back covers, midframes for iPhones, glass for iPads, ceramic and sapphire for Apple Watch, and panels for Vision Pro.
• 2025F: Expected to secure 60%+ share of iPhone 17’s upgraded cover glass and expand midframe supply from one to three models. 2026F: Expected to supply ultra-thin glass (UTG) for Apple’s first foldable iPhone and expand supply to Android brands.
• Apple accounted for about 50% of Lens Tech’s FY24 revenue, forecasted to grow 15% YoY in FY25/26F.
• Assembly business with Xiaomi surged 81% YoY in FY24, improving segment diversification and reducing Apple dependency from 71% in FY22 to 50% in FY24.

2. Smart Vehicles: Accelerating Adoption of Intelligent Cockpits

• Lens Tech is a leading supplier of intelligent cockpit solutions (central screens, B/C-pillars, multi-functional glass) to top automakers including Tesla and Xiaomi Auto (30+ OEMs globally).
• Segment revenue CAGR of 29% in FY24-27F, with GPM improvement to 12-14% as overseas plants (Vietnam, Thailand) ramp up operations.
• Global market share in smart vehicle interaction systems reached 20.9% in 2024, making Lens Tech the top global provider.

3. Emerging Devices: Robotics, AR/XR, Smart Retail Drive Diversification

• Lens Tech is positioned as a first-mover in supplying precision components for humanoid robots (Tesla Optimus, AgiBot), AR/XR devices (Apple Vision Pro 2, Meta), and smart retail terminals (AliPay “Tap to Pay”).
• Emerging devices segment revenue projected to grow at a 39% CAGR in FY24-27F as global demand accelerates.

Valuation, Peer Comparison, and What’s Priced In

Lens Tech trades at 17x 12-month forward P/E, in line with its historical average but below the sector peak of 26x. Its H shares maintain a 20-30% discount to A shares, largely due to liquidity differences.

Business Segment Analysis

Consumer Electronics

• Lens Tech’s vertically integrated model (materials, components, assembly) enhances cost control and client stickiness, supporting future growth.
• Premium material upgrades (AR-coated glass, hybrid covers) in iPhone 17 and foldable models drive ASP and margin uplift.
• Xiaomi partnership boosts assembly and cross-selling of high-margin components, supporting steady segment revenue growth at 25%/18%/15% in FY25F/26F/27F.
• Foldable phone shipments forecasted to rise from 23.8m units in 2024 to 69.7m units in 2029F (24% CAGR), driving both volume and ASP for UTG covers.

Smart Vehicle

• Lens Tech’s smart vehicle segment to see 29% CAGR in FY24-27F, driven by early-mover advantages and mass production of ultra-thin laminated glass.
• GPM expected to improve from 10.2% in FY24 to 12.0% in FY25F as Vietnam and Thailand plants ramp up and product mix shifts to premium offerings.
• Strong demand forecasted from Tesla and Xiaomi as new models launch, lifting per-vehicle value and profitability.

Emerging Devices

• Robotics: Supplying head modules, joint modules, and dexterous hands for Tesla Optimus and AgiBot.
• AR/XR: Waveguide and micro-nano processing breakthroughs position Lens Tech as a supplier for Apple Vision Pro 2, Meta, and others.
• Smart Retail: Alipay’s aggressive “Tap to Pay” rollout in malls across Asia and Europe in 2026F drives segment expansion.

SWOT Analysis: Lens Technology

• Strengths: Advanced glass technologies (UTG, nano-ceramic), vertical integration, early-mover in emerging sectors, strong Apple and Xiaomi ties.
• Weaknesses: Low gross margin in assembly operations (~1.6%), high reliance on Apple (50% of FY24 revenue), heavy R&D spending on emerging tech may pressure cash flows.
• Opportunities: Surging foldable phone and AR/XR device demand, rapid growth in humanoid robotics and smart retail devices, global expansion.
• Threats: Volatile consumer electronics demand, rapid tech iteration, margin pressure from competition, geopolitical and trade policy risks.

Downside Risks

• Customer concentration: Apple is still the largest customer, contributing 50% of FY24 revenue. Any reduction in orders or delays in foldable iPhone launch could impact earnings.
• Profitability pressure: Scaling low-margin assembly operations may weigh on overall profitability.
• Intensifying competition: Price wars and tech advances in consumer electronics and smart vehicles could erode margins.
• Geopolitical risk: US-China trade tensions and tariffs may disrupt cost structures and market access, though Lens Tech has overseas production to mitigate risks.

Financials: Margin Trends, Balance Sheet, Cash Flow

• Gross profit margin declined from 20.9% in FY21 to 15.9% in FY24 due to assembly business expansion, but is forecast to recover gradually to 16.5% in FY27F.
• EBITDA margin expected to stabilize at 12-13% in FY25-27F as revenue mix shifts to higher-margin products and operational efficiencies scale.
• Net debt narrowed from Rmb3.4bn in FY24 to an estimated net cash position of Rmb1.9bn in FY26F, supported by improving free cash flow.
• Capex set at around Rmb5bn annually for overseas plant expansion to meet growing global demand.
• Dividend payout ratio maintained at 41.3% throughout FY24-FY27F.

ESG: Environmental, Social, and Governance Initiatives

Lens Tech has implemented robust ESG strategies, including energy-saving reforms in manufacturing, reducing carbon emissions by 27,553 tonnes in 2024. The company made Rmb7.75m in charitable donations, focusing on disaster relief, poverty alleviation, education, and support for disabled persons. Governance is anchored in a three-layer structure that involves board oversight, ESG representatives across units, and dedicated CSR management and support teams.

Conclusion: Investment Thesis and Outlook

Lens Technology is strategically positioned to benefit from premium component demand led by Apple, the electrification of smart vehicles globally, and emerging device adoption in robotics and AR/XR. Its vertical integration, global expansion, and technological leadership offer a compelling investment case, with the potential for robust re-rating as new products and markets mature. Key catalysts include accelerating market share gains in Apple’s supply chain, adoption of intelligent cockpits by automakers, and easing US tariff risks.

Stock Rating Definitions

• Add: Expected total return exceeds 10% over the next 12 months.
• Hold: Expected total return between 0% and 10% over the next 12 months.
• Reduce: Expected total return below 0% over the next 12 months.

Distribution of Ratings and Investment Banking Clients (Q2 2025)

Final Thoughts

Lens Technology’s rapid growth trajectory, technological prowess, and strategic global expansion make it an attractive investment within the technology component space. Investors should monitor key execution risks, customer concentration, and global trade dynamics, but the company’s fundamentals and forward-looking strategy point to a strong outlook in the years ahead.