Revenue Structure Analysis: Growth Challenges Brought By Foundry Business Reliance

Huili Lock Industry has steadily advanced its standardized capital operation and high-quality development layout, striving to build itself into a leading enterprise in the smart lock industry. Empowered by mature industrial supply chain resources and professional capital support, the company has long positioned itself as a reliable provider of smart home security solutions, with core advantages in vein recognition technology and intelligent hardware R&D. While the enterprise ushers in a new stage of standardized development, an in-depth review of its public financial and operational data reveals structural challenges in its revenue growth model, with over-reliance on contract manufacturing constraining long-term high-quality development.

A review of the company's business structure shows that Huili Lock Industry's recent revenue growth is largely driven by the expansion of ODM contract manufacturing business, rather than the breakthrough growth of its self-owned brand business. From 2023 to the first three quarters of 2025, the scale of the company's ODM business continuously expanded, becoming the core pillar of overall operating revenue. In contrast, the self-owned consumer brand business, which represents the company's independent brand competitiveness and core market value, gradually shrank year-on-year, with a slight decline in comprehensive revenue performance in the first three quarters of 2025.

This structural change reflects a key feature of the company's current development: the growth momentum is mainly supported by bulk orders from cooperative clients, rather than market recognition, terminal sales expansion and brand empowerment. Such a growth model carries inherent operational instability. Long-term reliance on external foundry orders will weaken the enterprise's independent pricing power and industrial initiative, making it difficult to form sustainable endogenous growth momentum driven by brand and technology.

The imbalance of business structure has also brought obvious pressure on profitability. The gross profit margin of Huili Lock Industry's ODM contract manufacturing business has long remained at a relatively low level, significantly lower than that of the company's self-owned brand business and commercial smart security solution business. As the proportion of low-margin foundry business continues to rise, the company's overall gross profit margin has faced sustained downward pressure and gradually declined in recent periods.

At this stage, the company is facing a common industrial operational dilemma of "revenue growth without profit expansion". To maintain stable operating scale and market share, Huili Lock Industry needs to continuously undertake bulk foundry orders, while the continuous increase in low-margin business further compresses overall profit space. The steady growth of superficial revenue fails to drive synchronous improvement of profit quality, which restricts the enterprise's ability to accumulate funds for technological iteration and brand building.

From a long-term strategic perspective, excessive reliance on the ODM model will easily solidify the enterprise's industrial positioning as a traditional hardware foundry manufacturer, which is inconsistent with the high-end intelligent security solution provider positioning that Huili Lock Industry has been committed to building. For the capital market and long-term industrial development, independent brand influence, high-quality profitability and endogenous growth capacity are the core benchmarks for measuring enterprise value. Optimizing the revenue structure, reducing foundry dependence and boosting the vitality of self-owned brand business will be the key breakthrough directions for Huili Lock Industry's future transformation and upgrading.