New-generation display technologies, represented by AMOLED, are progressively replacing LCD technology in application fields such as smartphones, tablet computers, wearable devices, and automobiles, thanks to breakthroughs in flexible substrate materials that enable screens to be foldable, rollable, and thinner. This trend is gradually making them the market mainstream, thereby offering more development opportunities for enterprises focused on AMOLED display driver chips. Taking Winconex Technology, which is currently seeking a listing in Hong Kong, as an example, the company is a fabless display driver chip designer primarily engaged in the research, development, design, and sales of AMOLED display driver chips and Micro-OLED display backplanes/drivers. On January 19, the company once again submitted a listing application to the Main Board of The Stock Exchange of Hong Kong Limited, with China International Capital Corporation (CICC) and CITIC Securities acting as joint sponsors. This marks a restart of its Hong Kong stock listing process, following the lapse of its initial application on June 26, 2025.

In this IPO, Winconex Technology stated in its prospectus that the company intends to use the raised funds to support the R&D and optimization of AMOLED TDDI chips and expand their application scenarios, support the R&D and optimization of Micro-OLED and Micro-LED display driver backplanes, and for strategic investments or acquisitions, among other purposes. This reveals Winconex Technology's determination to strengthen its technological moat amid the prevailing industry trend. However, can its performance of perennial losses attract investor attention in the secondary market?

Founded in 2012, Winconex Technology has, after more than a decade of development, evidently become a leading brand in the display industry. According to a Frost & Sullivan report, based on 2024 sales volume, Winconex is the fifth-largest supplier in the global smartphone AMOLED display driver chip market and the largest supplier in Mainland China. Simultaneously, Winconex is the largest China-based independent supplier in the global Micro-OLED display backplane/driver market, with a market share of 40.7% in 2024, ranking second globally. As of December 31, 2024, Winconex Technology's AMOLED display driver chips had been mass-produced and shipped to several leading global smartphone brand manufacturers, used in over 10 product series, with these brand manufacturers collectively accounting for more than a quarter of the global market share.

However, even with the dual advantages of a leading position and high market share, Winconex Technology's "profitability dilemma" has not been reversed. According to the prospectus, from 2022 to 2024, the company's revenue was RMB 551 million, RMB 720 million, and RMB 891 million, respectively, showing year-on-year growth. In contrast, the company's losses continued to widen, with annual losses of RMB 124 million, RMB 232 million, and RMB 309 million for the same periods. Additionally, the company's gross profit margin was highly unstable, at 31.9%, 0.4%, and 2.5% for the respective periods. For the first ten months of 2025, Winconex Technology's revenue was RMB 900 million, an increase of 17% from RMB 769 million in the same period last year; the loss for the period was RMB 195 million, compared to a profit of RMB 206 million in the same period last year; the gross profit margin was 14%, an improvement of 6.9 percentage points year-on-year.

Looking further, Winconex Technology's perennial losses may be due to the company being "squeezed from both sides" in the market. The company operates in the middle of the industry chain, lacking bargaining power both upstream and downstream, leading to severely compressed profit margins. Furthermore, under the dual competitive pressures of being overshadowed by international giants and intense competition among domestic peers, the company is inevitably affected by price wars. This has resulted in a situation where, despite the company's chip sales volume soaring from 14.06 million units in 2022 to over 50 million units in 2024, achieving revenue growth, the gross profit margin plummeted from 31.9% to 2.5%, indicating volume growth without corresponding profit increases. It is evident that although Winconex Technology holds a leading industry position, it has unavoidably entered a phase of "growing pains" characterized by revenue growth without profit improvement.

Compared to the declining demand for LCD display driver chips, the industry is gradually shifting towards advanced display technologies like AMOLED, thereby driving strong growth in the AMOLED display driver chip market in recent years. According to Frost & Sullivan, the global AMOLED display driver chip market has been growing continuously, with sales volume increasing from approximately 723.7 million units in 2020 to 1,292.2 million units in 2024, representing a compound annual growth rate (CAGR) of 15.6%. However, possibly due to slowing smartphone shipments, the global AMOLED display driver chip market's CAGR from 2024 to 2029 is expected to be slightly lower than historical growth rates. Nevertheless, emerging high-growth application areas, such as televisions, tablet computers, and automotive displays, are anticipated to become major growth drivers, supporting the continued upward development of the global AMOLED display driver chip market. In terms of sales volume, the global market is forecast to reach approximately 2,112.0 million units by 2029, with a projected CAGR of 10.3%.

Against this developmental backdrop, Winconex Technology's full-stack in-house R&D capabilities evidently provide the company with sufficient momentum to capitalize on industry dividends. Currently, Winconex has mastered industry-leading, integrated software-hardware, full-stack in-house display driver technology, comprehensively covering the three key technical areas: display driver chip design, driver compensation algorithm development, and pixel compensation circuit layout. Its launched LTPO display driver chips and high-resolution Real-RGB AMOLED display driver chips are industry firsts, with core performance reaching world-leading levels, thereby building a certain technological barrier. Simultaneously, Winconex places considerable emphasis on R&D investment—from 2022 to October 31, 2025, the company's R&D expenses were RMB 188 million, RMB 177 million, RMB 242 million, and RMB 225 million, accounting for 34.1%, 24.6%, 27.2%, and 25.1% of its total revenue for the respective periods.

However, it is important to note that this is not a permanent solution. With over 90% of its revenue reliant on the smartphone market, promptly developing a second growth curve is also key to diversifying the company's revenue streams. Examining the revenue structure, AMOLED display driver chips are the absolute core revenue source for Winconex Technology, contributing up to 91.6% of revenue in 2024, primarily used in high-end smartphones. In contrast, the revenue contribution from Micro-OLED display backplanes/drivers, mainly targeting AR/VR devices, is significantly lower, having continuously declined from 34.3% in 2022 to 8.4% in 2024. Therefore, if Winconex Technology wishes to reduce its dependence on a single business and apply its technological capabilities to areas less sensitive to price and with high growth potential, such as automotive displays and industrial simulation, the company needs to heavily invest in R&D for next-generation display technologies like AMOLED TDDI (Touch and Display Driver Integration) chips and Micro-LED, to build momentum for long-term development.

In summary, Winconex Technology's growth story presents a typical significant tension between a "high-ceiling market" and the "low-profit reality." Simply put, it stands in a promising sector but is currently experiencing growing pains. The core investment thesis revolves around betting on its ability to leverage domestic substitution trends and industrial capital support to successfully convert its technological and market share advantages into genuine, sustainable profitability in the future. Consequently, for investors, this might represent a high-risk, highly uncertain investment, requiring full awareness of the core risks mentioned above.