Everbright Securities: Fully Introducing AI to Drive Performance Surpassing Expectations, Maintaining a "Buy" Rating for Weiwei Electronics

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Everbright Securities released a research report stating that Gao Wei Electronics (01415) is expected to perform strongly in 2025, confirming the logic of its increasing share in the core customer supply chain. Revenue in 2025 is projected to reach

$3.5 billion, a significant year-over-year increase of

40.3%, mainly benefiting from increased orders for rear camera modules from core customers. Looking ahead to 2026, as AI accelerates from cloud to edge devices, such as smartphones and PCs, demanding higher imaging and sensing capabilities, the company, as a key optical component supplier, will benefit deeply.

Everbright Securities is optimistic about the company’s continued growth under the trend of smartphone optical upgrades, as well as the vast potential for expansion into new blue ocean markets like AI glasses and robots. The firm maintains its 2026 net profit forecast attributable to parent of $230 million, but considering that the progress of major customers’ rear camera modules may be gradual, and that the company will increase R&D investment to support long-term growth in 2027-2028, the 2027 net profit forecast is lowered to $290 million (from previous $340 million), with a new forecast of $360 million for 2028, maintaining a “Buy” rating.

Everbright Securities’ main points are as follows:

Event: The company released its 2025 annual results. 1) Revenue: In 2025, revenue is expected to reach

$3.5 billion, a substantial increase of

40.3% YoY, mainly driven by increased orders for rear camera modules from core clients. 2) Gross margin: In 2025, gross margin was 10.2%, down from 11.7% in 2024, mainly due to product mix adjustments and ongoing price competition. 3) Expenses: Administrative expenses in 2025 increased by 18.0% YoY to $128 million, mainly due to an increase of about $28.9 million in R&D spending, reflecting proactive investments in new projects and technological upgrades. 4) Net profit: In 2025, attributable net profit reached $197 million, up 65.4% YoY, with a net profit margin of 5.6%, up from 4.8% in 2024, indicating a significant improvement in profitability alongside revenue growth.

The company actively incorporates AI technology, with excellent operational efficiency highlighting its competitive advantage and laying a foundation for continued market share growth. Despite slight fluctuations in gross margin due to product mix changes, the company’s net profit growth rate (YoY +65.4%) far exceeds revenue growth (YoY +40.3%), driving a steady increase in net profit margin. Behind this is the company’s strong cost control and full-chain operational optimization during the introduction of new products. This “internal strength” of turning technological advantages into profitability is a core moat in the precision manufacturing field, giving it strategic leverage when securing new orders from key clients. Additionally, in cost control, the company restructured its manufacturing system in the second half of 2025 through comprehensive AI integration (covering production, R&D, supply chain, etc.), increasing employee numbers from 6,728 at the end of June 2025 to 6,854 at year-end, with only about 100 additional staff, yet achieving over $2.1 billion in revenue in the second half, with significant productivity improvements.

The 2026 outlook features an AI-driven optical innovation cycle, with a clear growth path. As AI accelerates from cloud to edge devices, demanding higher imaging and sensing capabilities, the company, as a core optical component supplier, will benefit deeply. Our judgment: 1)

With industry-leading yield and automation capabilities, the company is expected to gain more market share in the rear camera module field it has already entered; 2) The company is expected to deploy foldable iPhone camera modules in 2026 and enter the main rear camera module market for iPhones in 2027; 3) The company may become a core supplier for Apple’s diversified wearable devices (such as camera-integrated TWS earbuds, smart glasses, AR/VR headsets), with some products possibly mass-produced and launched between 2026-2027; 4) The company is actively leveraging AI to reconstruct R&D and manufacturing systems, creating a “data-driven, AI-collaborative, manufacturing-implemented” deep integration model, building technological barriers to ensure high-quality growth.

Profit forecasts, valuation, and ratings: The company’s strong performance in 2025 confirms its increasing share in the core customer supply chain. We are optimistic about its sustained growth under the trend of smartphone optical upgrades and the vast potential for expansion into new markets like AI glasses and robots. We maintain the 2026 net profit forecast of $230 million attributable to parent, but considering the gradual progress of major customers’ rear camera modules and the company’s increased R&D investment to support long-term growth in 2027-2028, we lower the 2027 forecast to $290 million, with a new 2028 forecast of $360 million, and maintain a “Buy” rating.

Risk warnings: Customer concentration risk, global smartphone shipment shortfalls, and slower-than-expected technological upgrades.

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Editor: Shi Lijun