Consumer Electronics Industry Shifts from "Scale Expansion" to "Value Enhancement"

As the 2025 annual reports and related performance forecasts for A-shares are gradually released, the overall performance landscape of the consumer electronics sector is becoming clearer. Under the influence of factors such as explosive demand in the AI market and rising cost pressures, the performance differentiation among listed companies in the consumer electronics industry in 2025 is quite evident. On one hand, the deep integration of artificial intelligence (AI) technology has led to innovative categories like AI smartphones and AI PCs, driving a structural recovery in the industry; on the other hand, growth in traditional smart terminals is sluggish, market competition is intensifying, and some manufacturers are under profit pressure. Industry insiders say this “hot and cold” phenomenon is not just short-term inventory cycle fluctuation but a profound restructuring of the industry’s underlying logic. The high-end transformation trend in the consumer electronics industry is becoming increasingly clear, shifting from a “scale expansion” model to a high-quality development path focused on “value enhancement and product structure optimization.”

Performance in Sub-sectors Varies

According to Tonghuashun iFind data, as of now, based on Tonghuashun’s industry (new) classification, there are 63 consumer electronics companies listed on A-shares that have disclosed their 2025 performance forecasts. Among them, 22 companies are expected to report positive results (including pre-increases, slight increases, and turnaround), while the remaining 41 companies forecast declines in net profit year-over-year or losses.

Additionally, from the performance briefings of more than ten listed companies already disclosed, a clear “hot and cold” pattern within the industry is evident. China Galaxy Securities released a research report noting that recent performance briefings of consumer electronics listed companies show that some optical sector companies are performing well, benefiting from demand in optical communications, AR/VR, machine vision, semiconductors, and automotive electronics; meanwhile, traditional sectors like smartphones are under pressure due to rising costs and demand constraints, impacting related industry chain companies.

Among the companies with positive forecasts, many, such as Litong Electronics, Huiwei Intelligent, Yingqu Technology, and Huiwei Technology, forecast a year-over-year increase of over 100% in net profit attributable to the parent company, showing remarkable performance. For example, Litong Electronics expects to achieve a net profit attributable to shareholders of the listed company between 270 million and 330 million yuan in 2025, representing a 996.83% to 1240.57% increase year-over-year. The company stated that this forecasted increase is mainly due to higher profits from its computing power business, narrower losses in manufacturing, and positive fair value changes in external investments.

Some listed companies whose products are mainly used in traditional consumer electronics fields like laptops have underperformed. For example, Hongxi Technology’s revenue and net profit are both expected to decline in 2025 due to intensified industry competition, customer price reductions, and a higher proportion of low-margin products. The company’s performance brief shows that during the reporting period, revenue was 394 million yuan, down 15.66% year-over-year, and net profit attributable to shareholders was -21.13 million yuan, down 229.39%.

In response, Bo Wenxi, Vice Chairman of the China Enterprise Capital Alliance, told the “Economic Information Daily” that the performance differentiation in the consumer electronics sector in 2025 is not just short-term inventory cycle fluctuation but a deep restructuring of the industry’s fundamental logic. He further explained that this differentiation is an inevitable result of technological and business paradigm shifts. As AI evolves from “additional functionality” to “architectural restructuring,” the consumer electronics industry is shifting from a “scale expansion” model to a high-quality development path focused on “value enhancement and product structure optimization.” Companies lacking core technologies will be permanently marginalized rather than waiting for cyclical recovery.

Impact of “AI Content” on Performance Quality

Behind the performance differentiation, the “AI content” is becoming a key factor influencing corporate performance. Bo Wenxi believes that the financial data of many high-growth companies now proves that AI-related businesses have moved beyond “concept hype” and are becoming real profit engines.

The performance of Foxconn Industrial Internet exemplifies this trend. In 2025, Foxconn Industrial Internet achieved revenue of 902.887 billion yuan, a year-over-year increase of 48.22%; net profit attributable to shareholders was 35.286 billion yuan, up 51.99%. The company stated in its annual report that in 2025, its cloud computing business continued to improve profitability, with a significant increase in AI-related business, becoming a major driver of performance growth. During the period, cloud computing revenue reached 602.679 billion yuan, up 88.70%, making it a key growth engine. Leveraging long-term accumulated technology and system integration advantages in AI server fields, the company continues to provide data center computing infrastructure products for global clients, promoting product structure upgrades toward higher value.

The empowering effect of AI on other leading enterprises is also evident. According to forecasts, Lixun Precision expects to achieve net profit attributable to shareholders between 16.518 billion and 17.186 billion yuan in 2025, a growth of 23.59% to 28.59%. The company states that through “core capability innovation” and “smart manufacturing upgrades,” it will comprehensively improve cost control across the industry chain, deeply integrate AI technology, and achieve leaps in production yield and efficiency. It will also continue to expand into new fields such as AI hardware, high-speed data center interconnects, thermal management, smart vehicles, and robotics, building a more resilient business matrix.

Zhaoxin Data also benefits from AI deployment, maintaining steady growth. Its recent annual report shows that in 2025, the company achieved revenue of 12.236 billion yuan, up 65.13%, and net profit attributable to shareholders was 1.164 billion yuan, up 68.32%. The company stated that during the period, it focused on “intelligent computing power + data storage + server remanufacturing + AIoT smart terminals,” accelerating key product launches and project deliveries, which drove rapid revenue growth. Meanwhile, it strengthened supply chain coordination and delivery management, with scale effects gradually emerging and profitability improving year-over-year.

Clear Path for High-End Transformation

Looking ahead to 2026, despite short-term challenges such as rising storage chip prices affecting the consumer electronics sector’s fundamentals, the industry’s high-end transformation path is becoming increasingly clear. Many brokerage reports suggest that AI is expected to become the core driver of new growth in the consumer electronics industry.

Caitong Securities’ analysis indicates that the high-end transformation trend in consumer electronics is clear, with continuous breakthroughs in innovative categories like AI terminals and foldable screens. Future growth momentum is gradually shifting. Although high costs for storage and components will still constrain smartphone shipments in 2026, this pressure will accelerate strategic shifts among industry players.

First Capital Securities believes that the traditional consumer electronics sector is entering a mature development stage, and AI is expected to inject new vitality. On one hand, existing product categories will be upgraded with AI features to stimulate consumer demand; on the other hand, deep integration of AI with specific scenarios will continue to generate new categories, offering broad growth opportunities along the industry chain. Companies with AI technology reserves and product implementation capabilities are likely to benefit most from the industry’s restructuring.

Based on industry trend analysis, Bo Wenxi believes that the high-end transformation of consumer electronics will unfold along three paths: first, AI terminalization, including deploying NPU (Neural Processing Units) and edge large models; second, form innovation, capturing growth opportunities in foldable screens and spatial computing; third, ecological integration, shifting industry competition from single product battles to “full-scenario experience” ecosystem building.

“This transformation has no middle ground,” Bo Wenxi summarized. The consumer electronics industry is undergoing a historic leap from a “manufacturing hub” to an “innovation source.” Over the next 3 to 5 years, whether companies can establish a closed loop of technology and business in the three dimensions of edge AI, form innovation, and ecological integration will determine their value hierarchy—either becoming leaders in the high-end value chain or being phased out as low-end capacity.