Due to power restrictions and chip shortages in the supply chain, Lens Technology's net profit in 2021 is expected to drop by more than 51%.

 On January 29, Lens Technology released its performance forecast, saying that the company's net profit attributable to shareholders of listed companies was 2.007 billion yuan to 2.399 billion yuan, a year-on-year decrease of 51% to 59%. The profit in the same period last year was 4.896 billion yuan.

At the same time, Lens Technology also expects its net profit after deducting non-recurring gains and losses in 2021 to be 1.343 billion yuan to 1.734 billion yuan, a year-on-year decrease of 61.34% to 70.07%. The profit in the same period last year was 4.486 billion yuan.

Lens Technology said that in 2021, despite the company facing new difficulties and challenges such as repeated epidemics, limited electricity use, and chip shortages in the supply chain, the company's management took effective measures in a timely manner and actively organized responses, and production and operations remained generally stable. At the same time, the company continued to make progress in its medium- and long-term development strategy deployment in metal business, new energy vehicle business, smart terminal assembly business, and photovoltaic new energy business, and also achieved new gains in strategic cooperation customer groups, market share, and new technology research and development.

Among them, during the reporting period, power restrictions had a certain impact on the production, delivery and operation scheduling of the company's orders. Due to power restrictions, some factories in Hunan, Taizhou and Dongguan parks were forced to temporarily suspend production, disrupting the established production and delivery rhythm, causing employee turnover, resulting in yield fluctuations and cost increases, and unable to complete production and delivery tasks in a timely manner as originally planned.

At the same time, Lens Technology put into operation two new parks in Huanghua and Xiangtan this year. The new factories, new production lines, new teams, etc. require a period of running-in. The initial operating costs are high, and the product structure is mainly new products. R&D investment is high, and the cost of recruiting employees and labor costs have increased. Therefore, no benefits will be generated in the short term.

In addition, during the reporting period, Lens Technology's downstream customers had strong demand for research and development in new fields, new technologies, and new products. The company's research and development projects and research and development expenditures related to new products such as smart wearable products such as watches, VR, and AR, new automotive products such as central control screens, B-pillars, new automotive glass, and various metal alloy products such as smartphone middle frames increased significantly, which had a certain impact on the short-term operating performance.

In addition, the COVID-19 pandemic and the global dual-carbon policy have led to a shortage of raw materials for industrial products and a sharp rise in prices, which has increased the company's procurement costs and had a negative impact on profits. At the same time, the COVID-19 pandemic has gradually intensified the contradiction between supply and demand for chips and semiconductors, causing some of the company's customers to ship less than expected.

Lens Technology stated that based on the easing of the epidemic situation within the year and the expectation of improvement in supply chain bottlenecks, it will seize the favorable opportunity of the recovery of terminal market demand, deeply explore new opportunities in the three major tracks of consumer electronics, new energy vehicles, and photovoltaic new energy, add new strategic cooperation customers, expand market share, and promote the development of various new products and new technologies to mass production, optimize the company's product structure, and integrate industrial parks, so as to strive to significantly increase the volume of smart terminal assembly business.