Apple's Glass Supplier Lens Technology's Net Income Up 1,322% YoY in 1H 2020
As an important link in Apple's supply chain, the total revenue and cash flow of the China-based company Lens Technology depends largely on the performances of Apple's iPhone, iPad and iWatch.
On August 18, one of Apple's (AAPL:NASDAQ) most important suppliers, Lens Technology (300433:SH), revealed its interim financial report, indicating a boost in revenue and net income as a result of its main customer Apple's increasing product shipments in the first half-year of 2020.
The total revenue is increased by 37% year-on-year during the first half of the year, reaching CNY 15.6 billion. The net income is the highlight of the release, marking a 1322% year-on-year growth with CNY 1.9 billion. The stunning net income growth is a strong contrast with the company's net loss in the same period of 2019 due to the declining orders from Apple and other Chinese smartphone vendors.
The main business, that accounts for over 80% of its total revenue is the cover glass business, namely the protection cover on the outermost layer of screens. For the company, large-sized cover glass accounts for around 13% of the total revenue while middle-and-small-sized cover glass takes around 70%. Apple's iWatch, iPad along with other Chinese brands such as Huawei and OPPO's wearables and tablets products are the main order sources of Lens glasses.
As the impact of the pandemic, the rocketing sales of PC and tablets with 26% year-on-year growth in the second quarter of 2020 drove the company's revenue from large-sized glass up by 40%. As the research institution Canalys forecasts, the demand for PC and tablets will increase for the following quarters. The favorable situation is similar for smartphones and smart wearables due to the economic rebound and the 5G rollout, which will simultaneously drive Lens Technology's revenue.