On September 11, Insta360 addressed two concerns that have weighed on investors: expectations for the second half of the year and the competitive pressure from DJI. The company’s response was measured. It emphasized increased spending on R&D, market expansion, brand building, and upstream support. Those investments have lifted costs and created near-term pressure on earnings.
The tension reflects how investor sentiment has swung over the past month. On August 14, when Insta360’s panoramic drone brand Antigravity began public testing, optimism surged. Shares nearly doubled in 15 trading days, briefly pushing its market capitalization above RMB 140 billion (USD 19.6 billion).
That momentum faded by the end of August, when Insta360 released its first interim results since going public.
In the first half, revenue reached RMB 3.67 billion (USD 513.8 million), up 51.2% year-on-year. Net income attributable to shareholders was RMB 520 million (USD 72.8 million), a modest 0.25% increase. Excluding extraordinary items, net profit was RMB 490 million (USD 68.6 million), up just 0.06%.
Concerns over profitability sparked a selloff. On August 29, shares fell more than 8% intraday before recovering, and the stock has since declined by more than 10% from its September 3 peak. Its market cap remains above RMB 120 billion (USD 16.8 billion).
The question now is whether Insta360 can sustain a valuation above RMB 120 billion, or whether DJI’s growing challenge will erode its lead. From panoramic cameras to drones and action cameras, DJI has matched Insta360 product for product.
Holding the line
As a pioneer in panoramic cameras, Insta360 still generates most of its revenue from consumer imaging devices. In the first half of 2025, panoramic cameras contributed 86% of revenue.
Margins are strong. In the second quarter, Insta360’s gross margin was 51.22%, higher than Apple’s 46.82%.
Growth has been fueled by investment in stabilization, AI imaging, and software ecosystems, alongside supply chain advantages and market share gains from GoPro. Since Insta360 launched its first flagship device in 2018 and DJI followed in 2019, Chinese brands have surpassed many overseas rivals, completing a first wave of domestic substitution in handheld imaging.
The rivalry has since escalated. DJI entered panoramic cameras with the Osmo 360 in July, targeting Insta360’s core market. The competition now spans the broader action camera segment.
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Can Insta360’s profitability hold?
Competition has shifted from overseas players such as GoPro and Ricoh to domestic heavyweight DJI. Critics argue DJI’s product launches show incremental innovation and close resemblance to rivals, but its supply chain and brand remain formidable. The Osmo 360, which drew comparisons to Insta360’s X5, sold out immediately. DJI has also announced a panoramic drone, echoing Insta360’s Antigravity launch.
Comparable technology and sales channels give DJI leverage to cut prices or accelerate product cycles. That would compress margins across the industry and weigh on Insta360’s profits.
Maintaining leadership requires heavier investment in R&D and marketing. In 2024, Insta360 released the One X5, Ace Pro2, and Go Ultra, while also working on wearable jewelry cameras and portable vlog devices.
R&D costs have risen sharply. In the first half, spending reached RMB 560 million (USD 78.4 million), more than double the previous year. The R&D-to-revenue ratio increased by 3.75 percentage points. Spending on panoramic and action cameras alone, excluding salaries, was nearly RMB 250 million (USD 35 million), equal to half of profits.
The model hinges on innovation-driven growth. But if costs keep rising while profits stagnate, earnings volatility will grow.
High risk, high investment
With its core business maturing, Insta360 is betting on panoramic drones and smart audio devices.
The Antigravity brand, launched in July, raised expectations. According to Cinda Securities, the global aerial photography drone market was worth USD 7.1 billion in 2023 and is projected to reach USD 12.2 billion by 2030, a compound annual growth rate (CAGR) of 7.6%. DJI controls more than 70%. If Insta360 captures 10% by 2030, incremental revenue could reach RMB 5 billion (USD 700 million), effectively creating a “second Insta360.”
For now, panoramic drones remain in testing, with unresolved production challenges and no revenue. DJI, the incumbent, has already announced its own version.
The rivalry reflects a broader tension: consumers seek alternatives to DJI, but its ecosystem and brand loyalty are hard to dislodge. Whether Insta360 can differentiate remains uncertain.
Meanwhile, costs continue to climb. R&D for panoramic drones and navigation systems has totaled RMB 610 million (USD 85.4 million), with RMB 170 million (USD 23.8 million) spent in the first half alone, excluding salaries. Marketing costs are also expected to rise, putting further pressure on profitability.
Chasing multiple growth tracks risks stretching resources and diluting Insta360’s core strengths at a time of heightened competition.
Is its valuation justified?
Since its June IPO, Insta360’s stock has surged nearly sixfold. As of September 11, its market cap stood at RMB 127 billion (USD 17.8 billion), with a price-to-earnings (PE) ratio of 128. Its 2025 forward PE ratio is still above 100.
By comparison, peers such as Xiaomi, Xgimi, Anker, and Roborock trade at an average PE ratio of 36, with 2025 forecasts at 28.
According to Frost & Sullivan, the global handheld smart imaging market was RMB 36.5 billion (USD 5.1 billion) in 2023 and is projected to reach RMB 59.2 billion (USD 8.3 billion) by 2027, a 12.9% CAGR. Extending that pace through 2030, the market would reach RMB 127 billion. If Insta360 captures 35%, revenue would reach RMB 44.5 billion (USD 6.2 billion). Adding RMB 5 billion from drones, total revenue could be RMB 49.5 billion (USD 7 billion).
If net margins narrow to 10–12% due to competition and higher costs, net profit would be RMB 5–6 billion (USD 700–840 million). At a PE ratio of 20–25, a fair 2030 valuation would be RMB 100–150 billion (USD 14–21 billion).
In other words, today’s valuation has already priced in projected 2030 growth, including drones. Any misstep, combined with DJI’s aggressive expansion, could trigger a correction. The market has paid in advance for Insta360’s future. Now the company must prove it can deliver.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Ding Mao for 36Kr.