On February 9, Vitalink Technology Co., Ltd., a hidden champion providing nano-scale coating technologies for global consumer electronics giants including Apple and Samsung, formally submitted a listing application to the Hong Kong Stock Exchange, with CICC and Deutsche Bank as joint sponsors.

According to ZS Consulting, by revenue in 2024, the company is the world's largest provider of PVD interface enhancement solutions for metal components in consumer electronics, with a market share of 26.2%. The IPO application not only reveals a nano-scale "alchemy" business in the consumer electronics supply chain, but also draws market attention to a core question: when a company's fate is deeply tied to a small number of tech giants, how sustainable is its enviable high-growth story?

Core Business: Defining the "Last Nanometer" and Deeply Bound to Global Tech Giants

The company's core business lies in Physical Vapor Deposition (PVD) technology, which deposits nano-scale films on metal and glass surfaces of consumer electronics, smart vehicles and other products to deliver higher hardness, richer colors and more reliable performance. Such "nano cosmetic technology" has made the company a top "invisible craftsman" in the consumer electronics industry.

Its industry position directly stems from decades-long deep binding with "the world's two largest technology groups" (as described in the prospectus). Such stable relationships have brought substantial and certain orders, enabling the company to achieve high revenue growth of 49.3% in 2024.

However, the flip side is extremely high customer concentration risk. According to the prospectus, for the first nine months of 2025, revenue from the company's top two customers accounted for 70.7% of total revenue, with the largest customer (Customer A) alone contributing 55.8%. This means order fluctuations from one international giant could easily affect half of the company's performance, representing the most significant vulnerability in its business model.

To address this structural risk, Vitalink is actively expanding its product categories to diversify risks. The most successful segment is the smart wearable device business, whose revenue surged 117.5% year-on-year to RMB 1.16 billion in 2024, rising to 22.3% of total revenue. With a high gross margin of 48.2%, it has become the company's most profitable growth engine.

Financial Perspective: Coexistence of High Growth and High Profitability, with Hidden Worries over Growth Quality

The company also boasts strong overall profitability, with gross margins remaining at a high level of 23.7%-23.8% in 2023 and 2024, and net profit margin consistently exceeding 10% during the Track Record Period, demonstrating value brought by technological barriers. Nevertheless, hidden concerns lie beneath the bright overall data: the smartphone, tablet and notebook business, the cornerstone of revenue (accounting for 78.4% in the first nine months of 2025), saw its gross margin drop from 19.8% in 2023 to 16.7% in 2024.

The prospectus explained that this was mainly because the company undertook more low-margin integrated interface enhancement and back cover assembly services to deepen relationships with core customers, exposing its passive position of having to sacrifice part of the profits to secure orders when negotiating with top customers. Meanwhile, the company has not neglected future investment: R&D expenditure reached RMB 326 million in 2024, accounting for 6.3% of revenue, to maintain its leading edge in nano-coating materials and processes.

Equity Structure and Market Prospects: Strong Industry Tailwinds, Breakthrough Depends on Technology Spillover

The company's equity structure reflects diversified capital layout. Controlling shareholder Wanjin Technology holds 52.25% of shares, ensuring stable control, while well-known private equity fund Bain Capital holds 34% of shares through multiple entities, bringing international capital vision. The IPO proceeds will be clearly used for "consolidation" and "expansion": about 60% will be used for capacity expansion to support the growth of existing core businesses, and about 30% for technological R&D and global market expansion respectively, showing the company's strategic intention to deepen existing advantages while reserving resources for new growth curves.

Vitalink is in a period of imaginative strategic opportunities. With AI technology driving a new round of hardware innovation, demand for precise interface treatment will boom. The global market size of PVD interface enhancement solutions is expected to grow from RMB 12 billion in 2024 to RMB 45.1 billion in 2029 at a CAGR of 30.4%.

However, the biggest risks and opportunities come from the same source. The company's future almost depends on answers to two questions: first, can it effectively manage and gradually reduce its high dependency on single customers? Second, can it successfully and extensively "spill over" its top PVD technology proven in consumer electronics to lead new sectors such as smart vehicles and AR/VR? At present, the combined revenue share of smart vehicles and emerging smart terminal businesses is less than 3%, and the cultivation of the second growth curve will take time.