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 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 devices is sluggish, market competition has intensified, and some companies 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 (new) industry 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 perform well (including increases, slight increases, or turnaround profits), while the remaining 41 companies forecast declines in net profit year-on-year or losses.

Additionally, from the performance brief reports 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 brief reports from consumer electronics listed companies show that, benefiting from demand in optical communications, AR/VR, machine vision, semiconductors, and automotive electronics, some optical sector companies are performing well; meanwhile, traditional consumer electronics like smartphones are under pressure due to rising costs and demand-side challenges, impacting related industry chain companies.

Among the companies with optimistic forecasts, many, such as Litong Electronics, Huiwei Intelligent, Yingqu Technology, and Huiwei Technology, forecast a year-on-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 an increase of 996.83% to 1240.57% year-on-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 primarily involved in traditional consumer electronics fields like notebooks 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-on-year; net profit attributable to shareholders was -21.13 million yuan, down 229.39%.

In response, Bai 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 industry fundamentals. He further explained that this differentiation is an inevitable result of technological and business paradigm shifts. As AI evolves from a “functional add-on” to a “structural reorganization,” 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. Bai Wenxi believes that the financial data of many high-growth companies now demonstrate that AI-related businesses have moved beyond “concept hype” and have become real profit engines.

The performance of Foxconn Industrial Internet exemplifies this trend. In 2025, Foxconn Industrial Internet achieved revenue of 902.887 billion yuan, up 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 AI-related businesses significantly increasing their share, becoming a major driver of performance growth. During the reporting period, cloud computing revenue reached 602.679 billion yuan, up 88.70%, serving as a key growth engine. Leveraging long-term technical expertise and system integration advantages in AI server fields, the company continues to supply data center infrastructure products globally, promoting product structure upgrades toward higher value.

The empowering effect of AI is also evident in other leading enterprises. According to forecasts, Luxshare Precision expects to achieve net profit attributable to shareholders of 16.518 billion to 17.186 billion yuan in 2025, up 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 and promote deep integration of AI technology with manufacturing, resulting in higher production yield and efficiency. The company 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, revenue was 12.236 billion yuan, up 65.13%; 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, supply chain coordination and delivery management improvements have led to scale effects and enhanced profitability.

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 high-end transformation path is becoming clearer. Multiple 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. Industry growth momentum is gradually shifting. Looking forward, high storage and component costs will still constrain smartphone shipment growth in 2026, but this pressure will accelerate strategic shifts among industry players.

First Capital Securities believes that the traditional consumer electronics sector has entered a mature development stage, and AI is expected to inject new vitality. On one hand, existing product categories will be revitalized through AI feature upgrades, boosting consumer willingness; 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 industry restructuring.

Based on industry trend analysis, Bai Wenxi believes that the high-end transformation of consumer electronics will proceed 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 leaves no middle ground,” Bai 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 controllers of the high-end value chain or being phased out as low-end capacity.