(Yicai Global) Aug. 31 -- Shares of OFilm rose but retreated along with major stock indexes after an insider at the Chinese camera lens maker said the firm is partnering with Huawei Technologies after ending its cooperation with Apple.

OFilm's stock price [SHE: 002456] closed 0.9 percent down at CNY6.41 (90 US cents) after surging as much as 5.1 percent intraday. China’s major stock indexes all dropped today, and the Shenzhen Stock Exchange Component Index fell by 1.3 percent.

The maker of touchscreen components is cooperating with telecoms giant Huawei, Yicai Global reported yesterday, citing an employee from Nanchang-based Ofilm's investor relations department. That prompted Ofilm's shares to rally by almost 10 percent yesterday.

The company ended its partnership with Apple in the second quarter of last year, causing its shipments in the second quarter of this year to decline from a year ago, said the insider. OFilm will focus on new fields including smart cars, the Internet of Things, virtual reality, and augmented reality, she added.

As an electronic foundry service provider, OFilm may be engaged in mobile phone foundry and other services for Huawei, noted Sheng Linghai, an analyst at Gartner.

The manufacturer of optical products has been having a tough couple of years. It lost CNY874 million (USD127 million) in the first half of this year with a gross profit rate of 3.4 percent. Moreover, it lost CNY2.6 billion (USD377.5 million) last year, widening from CNY1.9 billion in 2020, according to its earnings reports.

The lack of profit is caused by the finished partnership with Apple while shipments to Huawei declined due to the phonemaker's chip shortage, the firm said. The pair used to partner on the Shenzhen-based firm's P50 mobile phone model.

The company has been seeking to optimize its balance sheet. OFilm sold Delta Image Technology, an audio and video equipment developer, to semiconductor firm Wingtech Technology for CNY2.4 billion last year.

Moreover, OFilm has been making great efforts to gain a larger market share in the optical field of smart vehicles, smart homes, VR, AR, and wearables. In the first half, the firm logged a 44 percent increase in revenue in its smart vehicle business to CNY596 million from a year ago.

Last year, the car product segment earned CNY1 billion in revenue, becoming the only segment with growth. However, such products made up less than 5 percent of OFilm's business in 2021.

Editors: Shi Yi, Emmi Laine, Xiao Yi