On the 24th, VIZIONFOCUS announced positive news during its earnings conference. The management team stated that they have been seeing increasing orders this year, with many customers returning. They expect that by the second quarter, capacity utilization will exceed 80%. Given the rapid recovery of orders, if market demand continues to rise, the company may add two more production lines in the second quarter. However, the decision will depend on market conditions, particularly around the 618 shopping festival.
During the conference, it was unusual that Chairman Huang Xiuquan and General Manager Shi An were both absent. CFO Li Xingjuan explained, "The 'spring swallows are coming,'" indicating a recovery in the overall market. The two senior executives are actively working on securing orders, which is why they couldn’t attend the conference.
Li Xingjuan noted that although China’s overall economy is in a downward phase, the contact lens market remains on a growth trajectory. Sales of the top three brands in 2024 have increased by 13%, demonstrating the industry’s resilience despite challenging conditions. However, the market structure is changing, with price competition intensifying and products shifting toward longer life cycles. In this environment, the "cost-performance ratio" (CP value) has become a critical competitive factor. Emerging e-commerce platforms like Douyin have seen sales growth of over 100% in contact lenses, showing that high CP-value products are more likely to stand out and secure orders.
Looking at the market share structure, the four major U.S.-based brands have seen their market share drop from 29% to 23%, losing 6 percentage points in a single year, indicating a decrease in consumer loyalty to traditional brands. In contrast, domestic Chinese brands have seen their market share grow from 38% to 47%, highlighting the growing attention and preference for local brands.
In the current highly competitive landscape, Taiwan-based manufacturers are gradually losing their advantage. VIZIONFOCUS has managed to stand out due to its high level of automation and high-quality production capabilities at its own factory in China. This gives it a significant advantage in quality, cost, and delivery times. This vertically integrated production model has become a key factor in VIZIONFOCUS’s success in competing with both Chinese and Taiwanese manufacturers.
Li Xingjuan mentioned that the poor performance of VIZIONFOCUS in the Chinese market in several quarters last year was mainly due to its decision not to lower prices actively. While some price adjustments were made, the company still tried to maintain price levels, which resulted in lost orders and affected economies of scale and gross profit structure. This year, the company has changed its strategy, opting to offer moderate discounts to customers in exchange for order recovery. By leveraging economies of scale, they can maintain gross margins at reasonable costs.
Looking ahead to 2025, VIZIONFOCUS expects the Chinese market to maintain double-digit growth potential. Since the beginning of the year, the company has observed a noticeable recovery in orders, with many customers returning. It anticipates that by the second quarter, capacity utilization will exceed 80%. Given the rapid recovery of orders, if market demand continues to rise, the company may add two more production lines in the second quarter, increasing monthly capacity from 54 million to 57 million pieces. However, this expansion is still under planning, and the company will need to observe demand trends around the 618 shopping festival before making a final decision.
Resource: 中國市場「春燕要來了」，望隼評估第二季擴增兩條產線
