Recently, Insta360 revealed its plan to source production materials, including molds and accessories, from its affiliated entity, Dongguan Rongguang Optics Co., Ltd. (hereinafter referred to as "Rongguang Optics"). This procurement is set to escalate the daily transaction volume with the related party by an additional 81 million yuan in 2026, culminating in an estimated total annual amount of 110 million yuan (excluding tax) post-increase.

This transaction is categorized as the purchase of goods from related parties. The company clarifies that the move is aimed at addressing daily operational needs and fostering new business growth, adhering to market-based pricing principles to ensure fair and reasonable pricing. It explicitly states that the transaction will not compromise the interests of the company and its minority shareholders, nor will it undermine the company's independence or lead to reliance on the related party.

Rongguang Optics specializes in the R&D and manufacturing of optical lenses, molds, and precision components. Situated in the optical manufacturing hub of the Guangdong-Hong Kong-Macao Greater Bay Area, in close proximity to Insta360, the geographical advantage naturally enhances supply chain responsiveness and reduces logistics costs. However, due to the related party relationship, the substantial increase in procurement amount has inevitably become a focal point of market attention.

From an operational standpoint, Insta360 has been intensifying its foray into AI imaging, professional-grade VR cameras, and sports scenarios in recent years. This expansion has resulted in a significant surge in customized demand for optical modules, driven by new product iterations. The company's 2025 annual report indicates a year-on-year increase in inventory turnover days, which may be linked to proactive material preparation for the mass production of flagship new products in the latter half of the year. Nevertheless, this must be evaluated in conjunction with the terminal sales offtake rate for a comprehensive analysis. Variations in this indicator could reflect either proactive expansion stockpiling or the impact of fluctuations in the offtake rhythm of certain older models.

Nevertheless, considering the company's overall shipment volume is on an upward trajectory, this additional procurement amount is most likely directly tied to proactive material preparation for the mass production of flagship new products in the latter half of the year, with clear business rationale.

Looking back, Insta360 encountered regulatory inquiries regarding the fairness of related party transactions during its IPO phase. At that time, the company proactively scaled down transaction volumes with related parties like Rongguang Optics to allay market concerns. Now, not only has the related procurement quota rebounded to a high level, but it has also witnessed a significant jump compared to actual amounts in previous periods. The estimated 110 million yuan for 2026 far surpasses the actual figure for similar related party transactions throughout 2024.

Judging from the announcement's wording, the company deliberately emphasizes "market-based pricing" and "no dependency formed," clearly aiming to bolster investor confidence. Based on a rough estimate of the company's total procurement amount in 2025 (using "cash paid for goods and services received" in the cash flow statement as a reference), the proportion of this related party procurement remains within a reasonable range.

Regarding disclosure obligations, since the amount exceeds 3 million yuan and is projected to account for over 0.5% of net assets, board review and announcement procedures must be adhered to. For shareholder meeting review procedures, as the amount surpasses 30 million yuan and is expected to account for more than 1% of net assets, it must be submitted to the shareholder meeting for approval. Meanwhile, this proportion is still well below the 30% empirical threshold typically monitored in regulatory practice for constituting "significant dependency," not breaching the independence底线 (bottom line) in the short term.

In fact, related party transactions between Insta360 and Rongguang Optics are not an isolated incident. The optical industry is highly specialized and characterized by customized collaboration, with many leading optical companies forging deeply bonded joint R&D relationships with downstream terminal manufacturers. Such collaborations often utilize equity associations or long-term exclusive supply agreements as links, making related party transactions a common occurrence in the industry.

Purely "unrelated" external procurement may actually be detrimental to core process confidentiality and joint R&D efforts. Related party transactions are not inherently flawed; the crux lies in whether they possess genuine commercial logic and whether pricing can withstand third-party scrutiny. Notably, Insta360 has also been actively nurturing a non-related optical supplier system in recent years to foster checks and balances. The statement of "no dependency formed" in this announcement can, to some extent, be viewed as an indirect declaration of a diversified supply chain strategy.

From the perspective of the company's financial health, as of the end of the first quarter of 2026, Insta360 boasted over 3 billion yuan in cash and trading financial assets on its books, possessing ample payment capacity. There is no scenario where the company is compelled to accept high-priced related party procurement due to financial constraints. This 110 million yuan related party procurement appears more like a rigid projection during the capacity expansion phase, while also serving as a litmus test for the company's supply chain governance capabilities.

As of press time, Insta360 has not provided further clarification on whether this related party transaction involves core modules for a new generation of AI cameras. The company anticipates convening a board meeting and shareholder meeting soon to review the proposal, at which time independent directors and the supervisory board will also issue special opinions.

Ofweek Optical will continue to monitor the subsequent review procedures for this transaction and the verification opinions of independent financial advisors, aiming to present a more comprehensive commercial landscape.