Lens Technology Co.,Ltd. (300433.SZ) reported a sharp decline in first-half profits, with net profit halved and core earnings down more than 70%, as a strengthening yuan triggered hefty currency conversion losses.

The company posted total operating revenue of RMB 28.87 billion for the first half of 2026, down 12.42% from RMB 32.96 billion a year earlier. Net profit attributable to shareholders fell 49.52% to RMB 577 million, while net profit excluding non-recurring items dropped 70.45% to RMB 278 million. Net cash flow from operating activities also weakened, sliding 53.5% year-on-year to RMB 2.01 billion.

Currency translation losses emerged as the single biggest drag on profitability. With the bulk of overseas business settled in U.S. dollars, the rapid and one-sided appreciation of the renminbi against the greenback during the period created significant conversion headwinds. Forex losses in financial expenses reached RMB 492 million, compared with a net gain in the same period last year. Total finance costs surged 496.29% to RMB 517 million, up from RMB 130 million previously, and when factoring in indirect revenue impacts, the overall hit from exchange-rate swings was estimated at roughly RMB 1 billion.

At the core business level, revenue from smartphones and computers fell 17.67% to RMB 22.38 billion, accounting for 77.54% of total revenue. The company attributed the drop to memory chip cycle disruptions that dampened end-market demand and reduced assembly revenue. Memory chip prices have climbed sharply since the second half of 2025, inflating costs for downstream handset and PC makers. Industry data from IDC shows global smartphone shipments contracted 4.1% year-on-year in Q1 2026, with the decline widening to 6.7% in Q2.

Inventory impairment charges also weighed on results, with total asset impairments rising 21.58% to RMB 437 million. Income tax expenses jumped 199.15% to RMB 154 million, as deductible losses from certain subsidiaries were fully utilized in the prior year.

Customer concentration remains extremely high. According to the 2025 annual report, the largest client accounted for 45.01% of total sales, with the top five clients collectively representing 81.64%. Back in 2022, Apple alone contributed over 70% of revenue, and while that dependency has gradually eased, the concentration level still poses significant risk. Analysts note that any fluctuation in a single brand's product cycle could have a marked impact on performance.

Among emerging businesses, smart automotive and cockpit solutions generated RMB 3.37 billion in revenue during the period, up 6.56% year-on-year. Smart head-mounted displays and wearables brought in RMB 1.78 billion, rising 7.95%, while other smart terminal products including robotics contributed RMB 534 million, a 46.92% surge. Together, these three segments still account for only around 19.7% of total revenue, insufficient to meaningfully offset weakness in the core smartphone business.

The company is pressing ahead with diversification efforts across several fronts. In TGV glass through-via technology, Lens Technology has signed a strategic cooperation memorandum with Intel, with a dedicated 30,000-square-meter plant under construction. In AI server structural components, liquid cooling modules and high-end precision cabinets have passed testing with leading computing power manufacturers. In the commercial aerospace space, a satellite equipped with aerospace-grade UTG solar wing solutions has been launched and successfully completed in-orbit verification.