O-Film Draws Attention After Whistleblower Report

A whistleblower letter has put listed company O-Film back in the spotlight.

According to an August 7 report by Consumer Daily Finance, an investor alleges that O-Film's actual controller, Cai Rongjun, harmed the listed company's interests through related-party transactions, technology use and cost allocation via Shenzhen Xinfeiguang Communication Technology Co., Ltd., a company under his control. The report also stated that, as of publication, O-Film had not responded to the specific issues raised in the complaint.

Screenshot source: an article on the Consumer Daily Finance WeChat account

First, the most important caveat: what is currently public reflects investor complaints and media questions, not a regulatory investigation finding, let alone confirmed wrongdoing. The claims in the complaint materials regarding OEM gross margin, whole-unit gross margin, capacity, technology transfer and expense allocation still need to be verified against company contracts, transaction working papers, patent licensing documents, cost allocation records and regulatory checks.

But that does not mean the market can simply laugh it off. On the contrary, when a listed company whose profit excluding non-recurring items has been under pressure for years conducts sizable business with a high-growth company controlled by its actual controller, greater transparency is naturally required. Related-party transactions are not necessarily problematic, but if it remains unclear where the business opportunities, technological achievements and profits ultimately end up, the market will certainly demand answers.

As of 15:00 on August 8, the company had not issued a public statement on its official account responding to the matter.

Why has the controversy suddenly flared up?

Xinfeiguang was founded in 2020 and focuses on optical modules and AOC products. So how does O-Film actually make money? In a nutshell: it makes the "eyes" for smartphones, cars and all kinds of smart devices.Optical camera modules, optical lenses and fingerprint recognition modules are all its core products.

On July 14, O-Film explained on an investor interaction platform that the optical communications industry requires heavy upfront R&D and capacity investment and carries considerable uncertainty. The business was incubated off the balance sheet in its early stage to isolate risk and prevent ongoing investment and periodic losses from hitting the listed company's earnings.

Source: Hithink RoyalFlush

This explanation is not entirely without commercial logic. It is not uncommon in the market for listed companies to incubate immature projects outside the group.

The problem is that risk isolation cannot mean isolating losses alone while the listed company bears the costs of R&D, equipment, personnel and order coordination, only for the mature profits and valuation to be kept entirely outside the group.

If that outcome occurs, the so-called incubation could turn into a blurred boundary of interests.

The whistleblower report drew attention against three practical backdrops.

First, optical modules are in an upcycle driven by AI computing infrastructure buildout, and high-speed products offer considerable market upside. The more Xinfei Guangyue is portrayed as capacity-constrained and flush with orders, the more investors will ask: who bore the trial-and-error costs back then, and who reaps the returns today?

Second, O-Film's earnings base remains thin. The company posted revenue of 22.150 billion yuan in 2025, up 8.38% year on year, but net profit attributable to shareholders of just 41.63 million yuan and a loss of 29.89 million yuan on an adjusted basis. Revenue in the first quarter of 2026 fell 23.60% year on year, with a net loss attributable to shareholders of 247 million yuan. The company subsequently forecast a net loss attributable to shareholders of 360 million yuan to 460 million yuan for the first half.

Third, the scale of related-party transactions has drawn attention. According to a media summary of the company's announcements, the projected transaction amounts between O-Film and related parties such as Xinfeiguang and Xinsikao have increased.

However, growth in total transaction value alone does not prove tunneling of benefits. Meaningful judgment requires breaking down the counterparties, the direction of purchases and sales, product categories, actual amounts executed and gross margin levels.

Related-Party Transactions: Compliance Is Not Just About "Following Procedure"

These are my humble views, drawn from years of experience in the primary market. I welcome further discussion in the comments section if you have better insights.

The Company Law makes clear that controlling shareholders, actual controllers, directors and senior management must not use related-party relationships to harm the company's interests. The CSRC's information disclosure rules and the Shenzhen Stock Exchange's guidelines on related-party transactions also require listed companies to identify related-party relationships, carry out review and disclosure procedures, and strictly enforce the system under which interested directors and shareholders abstain from voting.

To judge this dispute, at least five hurdles must be cleared.

First is the related-party relationship. If Xinfei Guang is controlled by Cai Rongjun, there is little doubt that a related-party relationship exists with O-Film. What really needs verification is whether the list of related parties is complete, whether changes are reported promptly, and whether the full chain of every transaction is disclosed on a look-through basis.

Second is pricing. The company's claim of "benchmarking against market prices" is only a conclusion, not a substitute for evidence. Regulators and investors need to see comparable third-party quotations, cost-plus models, differences in capacity utilization, quality liability, payment terms, equipment depreciation, and the risks borne in the contract manufacturing stage.

A low gross margin is not necessarily unfair, because the value added in component processing differs from that in complete-unit sales. But if a listed company bears high investment, high depreciation and quality risks yet receives clearly inadequate returns, a reasonable explanation is needed.

Third is the use of resources. Whether patents, processes, R&D personnel, plants, equipment and management systems are shared, how costs are allocated, and whether there are licensing fees, service fees or rents are the key evidence for whether the whistleblower's claims hold up. Similarity of technical names alone does not prove a free transfer of value; likewise, the fact that patents remain registered under the listed company does not rule out that actual use went uncompensated.

Fourth is the attribution of business opportunities. The most sensitive aspect of off-balance-sheet incubation is not the phrase "off-balance-sheet" itself, but whether the listed company explicitly assessed and passed on the opportunity, whether independent directors and the board were fully informed, and whether mechanisms exist for priority acquisition, asset injection or avoidance of competing businesses. If the risk has diminished and the business has matured, the original rationale for separation needs to be re-examined.

Fifth is information disclosure. If material doubts affecting investment decisions have already surfaced in the market, a company cannot remain indefinitely at the level of generic answers. The most effective response is not an emotional denial but a verifiable checklist: transaction amounts, categories, pricing methods, third-party comparable prices, actual gross margins, technology licensing, cost allocation, receivable and payable balances, and fund flows over the past three years.

Ofilm's true foundation remains its core optics business

Ofilm currently operates three business systems — smartphones, smart vehicles and new areas — with products covering camera modules, optical lenses, fingerprint recognition, automotive vision and machine vision.

Revenue continued to grow in 2025, with net cash flow from operating activities reaching RMB 276 million, a marked improvement over the previous year. This shows that the company is not without an industrial foundation; its supply chain capabilities, large-scale manufacturing experience and optics technology expertise remain important assets.

But capital markets look beyond revenue scale. In 2025, the net profit margin attributable to shareholders was less than 0.2%, and net profit excluding non-recurring items remained negative, leaving a very thin profit cushion. In the first quarter of 2026, the company's R&D expenses were RMB 245 million, up slightly year on year, while revenue declined noticeably. Continued R&D commitment is commendable, but it must ultimately translate into product pricing power, an improved customer mix and sustained cash returns. Otherwise, high spending will keep eroding shareholder patience.

Source: Hithink RoyalFlush

More notable is the balance sheet structure. At the end of Q1 2026, the company's total assets were 19.131 billion yuan and total liabilities were 14.362 billion yuan, implying a debt ratio of about 75.1%. Accounts receivable at period end stood at 5.506 billion yuan, down 32.14% from the start of the year but still equal to 1.48 times quarterly revenue. For a low-margin manufacturer, any one of order volatility, raw material price increases, collection timing or capacity depreciation can quickly amplify earnings swings.

In addition, the company's gross margin in 2025 was only 10.31%, well below the average gross margins of the Shanghai Stock Exchange (17.31%) and the Shenzhen Stock Exchange (19.01%).

This also explains why the related-party transaction controversy is particularly glaring. The more a company needs to repair its earnings, the less the market can accept unclear boundaries around potential profits.

In my view, if Ofilm can produce complete evidence showing that the transaction was fair, the technology was paid for, costs were reasonably allocated, and a clear mechanism is in place for mature projects to return to the listed company, this challenge could also become an opportunity to improve governance transparency.

A Few Final Words

Many investors in the market today are prone to two mistakes. One is to pass judgment as soon as a report surfaces; the other is to assume everything is fine once a company has cleared the approval process. The former ignores the evidence; the latter ignores the substance.

What related-party transactions really need to answer has never been whether a seal was stamped, but whether the listed company's money, technology and business opportunities received equivalent returns. Off-balance-sheet incubation can isolate risk, but it can also create conflicts of interest. What separates the two is not slogans, but transparent contracts, fair prices, independent decision-making and traceable flows of benefit.

Ofilm has genuine industrial expertise, but it also faces the hard reality of restoring profitability. The market may give a company time to transform, but it will not accept ambiguity indefinitely. The best way to protect the company, its actual controller and minority shareholders right now is to make the accounts clear, the technical boundaries clear, and the ultimate ownership of the mature business clear.

When a listed company funds R&D and the actual controller's private company reaps the rewards, is that "risk isolation" or "tunneling of interests"? That is the central question at the heart of this whistleblower complaint. In my view, the complaint may not hold up, but the doubts deserve a serious response.

For a listed company, silence saves only a few days of explanation costs, but may overdraw years of accumulated governance credibility.

Risk notice: This article is based on public information as of August 8, 2026 and does not constitute investment advice. The reported allegations still await further response from the company and regulatory verification; the announcements and determinations of the relevant authorities shall prevail.

       Original title : Accused of "draining" a listed company! O-Film draws attention