Wetouch Technology Inc.

What they do

Wetouch Technology Inc. operates through wholly-owned subsidiaries, primarily Sichuan Vtouch Technology Co., Ltd., to research, develop, manufacture, sell, and service projected capacitive touchscreens. The product portfolio includes 7.0-inch to 42-inch screens in Glass-Glass (GG), Glass-Film-Film (GFF), Plastic-Glass (PG), and Glass-Film (GF) structures. These are used in financial terminals, automotive, POS, gaming, lottery, medical, and HMI industries. Sales are both domestic in China and international, covering Taiwan, South Korea, Germany, and other regions.

Revenue drivers

• Domestic sales (China) — Accounted for approximately 68.5% of revenues in 2025 (64.7% in 2024), representing the largest geographic segment.
• International sales (Taiwan, South Korea, Germany, others) — Accounted for approximately 31.5% of revenues in 2025 (35.3% in 2024).
• Product structures (GG, GFF, PG, GF) — GG and GFF are used in GPS/car entertainment, industrial HMI, financial terminals, POS, and lottery; PG in GPS/entertainment, smart home, robotics, charging stations; GF in industrial HMI.

Recent performance

For the year ended December 31, 2025, revenue was $45.1 million, up 6.6% from $42.3 million in 2024. Gross profit was $14.4 million (margin 31.8%), and net income was $7.2 million, up 20.0% from $6.0 million. Operating cash flow was $7.4 million in 2025 versus $1.1 million in 2024. In the quarter ended March 31, 2026, revenue was $5.3 million. As of March 31, 2026, the company had $120.5 million in cash and equivalents, total assets of $147.3 million, and total liabilities of $4.1 million.

Strategy

Management is actively constructing a new production facility in Chengdu Medicine City, Wenjiang District, Chengdu, Sichuan Province, with total capital requirements estimated at approximately $14.4 million; $13.3 million has been recorded in construction in progress as of December 31, 2025. The project is expected to be completed by the first half of 2027 and commence production by the end of 2027. The facility is primarily funded with existing cash and operating cash flows. The company continues to sell domestically and internationally, with a focus on maintaining product quality and certifications.

Risks

• Material weaknesses in internal control — As of March 31, 2026, disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting that had not been fully remediated.
• Construction and land use risks — Completion of the new facility is subject to delays, as previously experienced with construction materials, and failure to secure the certificate of land use right could severely impact operations.
• Major customer dependency — The business relies on retaining and attracting major customers; losing them could materially affect revenue.
• Accounts receivable concentration — A significant amount of accounts receivable could become uncollectible, affecting financial stability.

Outlook

Management expects the new facility in Chengdu to be completed by the first half of 2027 and production to start by the end of 2027. The company will continue to fund the project with existing cash flows and may seek additional financing if needed. As of March 31, 2026, there was a capital expenditure commitment of approximately $1.06 million for construction in progress.