From acquiring O-film for 4.39 million yuan in 2004 to a current market value of 42.7 billion yuan, O-film has many stories to tell over the past 20 years. However, the two most significant chapters in its history involve its entry into Apple's supply chain and subsequently, Huawei's. In between, O-film endured numerous hardships.

On October 21st evening, O-film shares surged to their daily limit, closing at 12.91 yuan per share, pushing the company's total market value to 42.73 billion yuan.

Notably, 12.91 yuan per share represents the highest price O-film has reached in the past 52 weeks. According to "Digital Intelligence Research Society", the last time O-film's share price exceeded 12.91 yuan was back in early 2021, when it was still a leading supplier in Apple's supply chain.

However, rumors that had been circulating for half a year finally materialized when O-film was officially removed from Apple's supply chain in March 2021. From 2020 to 2022, these years undoubtedly marked O-film's darkest hours, with losses totaling over 9.752 billion yuan across three years (1.945 billion, 2.625 billion, and 5.182 billion yuan, respectively). The company was even jokingly referred to within the industry as "O-Loss Film".

A turning point arrived in 2023, as the resilient O-film managed to secure a spot in Huawei's supply chain, becoming a major supplier of camera modules and fingerprint sensors for Huawei's Mate 60 series. News of this swiftly spread, sending O-film shares on a six-day winning streak. That year, O-film finally turned a profit, albeit a modest 77 million yuan compared to its previous losses, but it nonetheless sent a positive signal.

While losing Apple, O-film gained access to Huawei, Xiaomi, and other Chinese smartphone brands. Behind this transformation lies not just opportunity but also O-film's determined efforts to save itself. After being excluded from Apple's supply chain, O-film diversified its business beyond consumer electronics, venturing into robotics, smart homes, intelligent vehicles, and other optical fields.

Over the years, O-film has not only regained its footing but has emerged stronger than ever, taking a leading position in the industry. Investors who initially bought into O-film based on its association with Apple's supply chain are now closer than ever to breaking even.

**Entry into Apple's Supply Chain**

O-film's history dates back to 2001 when it was established as a Sino-foreign joint venture focused on the R&D, production, and sales of precision thin-film components for optical fiber communications. After more than three years of struggle, the original shareholders eventually gave up and exited the company.

In late 2004, Cai Rongjun and Cai Gaoxiao, brothers, acquired O-film for 4.39 million yuan, saving it from the brink of collapse. Under their leadership, O-film quickly emerged as a market leader, capturing 30% of the global market share for infrared cut-off filters. Soon after, O-film entered the capital market, solidifying its position in the industry.

Widely regarded as successful after entering the capital market, O-film and the Cai brothers capitalized on emerging trends in touchscreens, camera modules, and fingerprint sensors. As smartphones gained global popularity, O-film ventured into touchscreens in 2008, camera modules in 2012, and established Asia's largest fingerprint sensor module factory in 2014, firmly establishing itself in the optical industry.

In 2016, O-film acquired Delta Imaging, a camera module and optical lens company in Guangzhou, catapulting it into Apple's supply chain as one of the company's key suppliers in China. As a result, O-film's market value surged to over 70 billion yuan, rivaling that of Sunny Optical, a leading optical company.

In 2018, Apple alone contributed 8.3 billion yuan to O-film's revenue. This figure grew to 11.7 billion yuan in 2019 and 14.5 billion yuan in 2020.

However, these good times were short-lived. In 2020, the US Department of Commerce added O-film to a sanctions list alongside 10 other Chinese companies due to alleged human rights violations. In 2021, Apple removed 33 companies, including O-film, from its supply chain.

Following its exclusion from Apple's supply chain, O-film divested its customized Apple assets to Wintek and recorded significant impairment losses. At the same time, the company also recorded substantial inventory write-downs.

Despite these challenges, under Cai Rongjun's leadership, O-film persevered and remained resilient.

**Partnerships with Huawei**

The rise of domestic consumer electronics brands has transformed the supplier landscape for Apple and its competitors.

After being excluded from Apple's supply chain, O-film's financial performance suffered, but its investments in optics and intelligent automotive components remained robust.

Meanwhile, Huawei also faced sanctions from US authorities, which restricted its access to Taiwan Semiconductor Manufacturing Company (TSMC) for chip manufacturing and banned the sale of photolithography machines and other chip-making equipment to the company. For a long time, the lack of 5G chips severely impacted Huawei's smartphone market share.

On August 29, 2023, Huawei quietly launched the 5G version of the Mate 60 Pro. A month later, Huawei regained the top spot in shipments for this model. O-film, as a supplier of camera modules and fingerprint sensors for Huawei, contributed to the success of this phone by providing front and rear camera modules and fingerprint sensors.

Huawei's triumphant return lifted O-film along with it.

Beyond smartphones, Huawei has also chosen to partner with O-film in the automotive sector. According to "Digital Intelligence Research Society", O-film began exploring the automotive electronics market in 2016 and, by the first half of 2024, its revenue from this segment had surpassed 1 billion yuan, accounting for over 11% of total revenue.

As the domestic new energy vehicle industry booms, O-film has secured a place among the top-tier suppliers for domestic new energy vehicles, obtaining supplier qualifications from over 20 domestic automakers, including Huawei. O-film's products are used in camera lenses (for side and rear views), vision perception system modules, and other components in vehicles such as the AITO, Zhidian, and AITO M5 EV, among others.

Given these collaborations, O-film's second partnership with Huawei has been dubbed "Huawei's Second Rescue of O-film" within industry circles.

O-film's clientele in the new energy vehicle sector extends beyond Huawei, including brands such as JAC Motor, Chevrolet, and Xiaomi's SU 7, all of which source camera modules from O-film.

Today, O-film has emerged from the shadows of its exclusion from Apple's supply chain and is striding confidently into a new era.

**A Win for Hefei State-owned Assets**

Less than six months after being officially removed from Apple's supply chain, O-film found solace in Hefei Construction & Investment Holding Group (Hefei Jiantou).

In August 2021, Hefei Jiantou subscribed to 193 million newly issued shares of O-film for a total of 1.2 billion yuan. These shares became fully tradable on March 29, 2023.

Interestingly, on October 20, 2023, O-film announced that Hefei Jiantou had reduced its stake. Post-reduction, Hefei Jiantou's ownership in O-film fell below the 5% threshold, standing at 4.999998%.

However, just a day later, on a Saturday evening, O-film released another announcement stating that Hefei Jiantou had voluntarily committed not to reduce its stake in the company for the next six months.

According to "Digital Intelligence Research Society", Hefei Jiantou's stake reduction coincided with a surge in O-film's share price. This underscores Hefei's keen investment acumen in the venture capital space, as evidenced by O-film's V-shaped recovery since Hefei Jiantou's investment.

Beyond O-film, Hefei Jiantou has also made notable investments in companies like BOE Technology, NIO, Hefei Department Store Group, and Fengle Seeds, with impressive returns. One of its directly controlled subsidiaries, Qizhong Technology, became the first state-owned enterprise from Hefei to list on the STAR Market. Meanwhile, Jinghe Integrated Circuit became the third-largest wafer foundry in mainland China.

As "Digital Intelligence Research Society" understands, Hefei's investments seem to target struggling large enterprises, but they are actually part of a meticulous strategy to build a complete industrial ecosystem. In 1999, Hefei invested in iFLYTEK to help it overcome difficulties. In 2008, it assisted BOE Technology, which was losing 1 billion yuan annually at the time. In 2019, it invested 7 billion yuan in NIO.

Hefei's state-owned assets investment strategy is truly insightful.