Rijiu Optoelectronics AR Optical Film Grows 110%

Riju Optoelectronics recently released its 2026 interim report. The company posted revenue of RMB 320 million in the first half, up 5.91% year on year; net profit attributable to shareholders of RMB 34.7653 million, down 23.77%; and net profit excluding non-recurring items of RMB 33.7469 million, down 23.54%.

On a quarterly basis, the company's performance has clearly turned a corner. In the second quarter of 2026, it reported revenue of RMB 192 million, up 17.46% year on year and 50.12% sequentially; net profit attributable to shareholders of RMB 24.403 million, up 38.99% year on year and 135.50% sequentially; and net profit excluding non-recurring items of RMB 23.8431 million, up 42.98% year on year.

The sharp year-on-year and sequential growth in both revenue and profit in the second quarter stands in stark contrast to the first-half picture of "revenue growth without profit growth," indicating that the company's operating quality is improving quarter by quarter.

By revenue mix, the company's main business covers three segments: conductive films, optical films and OCA optical adhesives, with markedly divergent performance across products.

Conductive films remain the bedrock of the company's revenue, generating RMB 206 million in the first half, down 2.54% year on year, accounting for 64.38% of revenue, with a gross margin of 39.51%. Within this, ITO conductive film revenue fell 12.27% year on year, hit by both shrinking consumer electronics demand and the rising penetration of In-cell touch technology;

In dimmable conductive films, the company's products have successfully entered the supply chains of several well-known automakers' projects, with sales continuing to grow. However, to accelerate adoption across more vehicle models and increase penetration in the automotive panoramic roof market, the company negotiated a pricing strategy adjustment with its major customers, resulting in first-half revenue of 66.9577 million yuan for the product, down 9.24% year on year.

Optical film products were the standout growth driver in this earnings report. The AR optical film series posted revenue of RMB 53.8377 million, up 110.29% year on year, with a gross margin as high as 42.27%, an increase of 10.20 percentage points from a year earlier. While the company continued to ramp up in automotive displays, it also made substantive breakthroughs on the consumer electronics side, establishing a stable sales scale.

By contrast, OCA optical adhesive products generated revenue of RMB 48.4343 million in the first half, down 13.52% year on year, with a gross margin of -8.99%, remaining loss-making.

On the expense side, the company's total period expenses for the first half of 2026 were RMB 54.6108 million, an increase of RMB 11.2863 million from the same period last year, with the expense ratio rising to 17.07%, up 2.73 percentage points year on year. Selling expenses rose 23.37%, administrative expenses 21.97%, and R&D expenses 33.27% year on year, with R&D focused on foldable OCA optical adhesive and curved-surface OCA optical adhesive.

The sharp rise in expenses was one of the direct causes of the decline in net profit. In terms of financial health, net cash flow from operating activities was RMB 63.5599 million, down 31.33% year on year, mainly due to an increase in the settlement of construction and equipment payments through endorsed bank acceptance bills.

The balance sheet, however, shows total assets of RMB 1.297 billion at the end of the reporting period and net assets attributable to shareholders of listed companies of RMB 1.136 billion, with a debt-to-asset ratio of just 12.40%, indicating a relatively sound financial structure and limited repayment pressure.

Overall, Rijiu Optoelectronics is undergoing a structural transition as it adjusts its existing business and expands into new areas. Short-term profit is under pressure, but the long-term growth thesis still needs continued validation through future results. We look forward to new market developments ahead.