Raytron's Low-Price Strategy Lifts Profits

Industrials Author: Yangni Liu Nov 05, 2020 11:23 PM (GMT+8)

Raytron works on the design and manufacturing of integrated circuits, MEMS detectors and infrared detectors, which performed well even during the COVID-19 crisis.

Integrated circuit. Image Credit:   WikimediaImages  / Pixabay

According to the STAR board's daily newsletter, Raytron's operating incomes in the third quarter increased around 167%, about CNY 1.08 billion. Specifically, the sales volumes in the infrared detectors, chips and thermal cameras increased most rapidly. In a word, Raytron is not affected negatively by the COVID-19, and it is still optimistic about its profits in the fourth quarter.

Regarding Raytron's income structures, its operating income sources are made up of detectors, chips and complete machines. Specifically, their profits were around CNY 0.36 billion, CNY 0.21 billion and CNY 0.46 billion separately, an increase of 111.86%, 294.61% and 172.05%. As the COVID-19 has been controlled gradually, thermometric products will go back to normal, and non-thermometric products will attract more attention.

Raytron's low price strategy was deployed in two stages. Firstly, it lowered the price of customized products like detectors to occupy more significant markets, but this decreased its gross profit rates from 2018's 60.07% to 2019's 50.42%. Hence, the second step was to rely on the scale effect to improve its gross profit rates and keep a low price.