Open source securities: R&D and channels are increasing efforts to empower AI glasses, preliminary validation of demand potential.

Open Source Securities released a research report stating that the collision effect of fashion and technology in AI smart glasses is accelerating evolution, with the preliminary verification of demand potential. Multiple brands of AI glasses are selling well in the market, with the supply side accelerating capacity expansion; the fashion concept of glasses is evolving rapidly, and glasses have become a counter-cyclical category in luxury brands. Luxury goods groups are increasing their investment in the glasses business to help drive group growth. Currently, increased research and development and channel efforts are empowering the volume of AI glasses, accelerating the breakthrough of smart glasses. The main points of view of Open Source Securities are as follows: Multiple brands of AI glasses are selling well, and the supply side is accelerating capacity expansion FlashTech: On December 19, the first domestically produced AI shooting glasses, FlashTech AI Shooting Glasses, were launched with a retail price of 1499 yuan; the Collaborative Edition is priced at 999 yuan, ushering in the "thousand yuan AI glasses era." As of 22:00 on December 20, after 24 hours of pre-sales of the FlashTech Collaborative Edition, the total of 50,000 units planned to be produced before the Spring Festival have sold out. To ensure sufficient production capacity of the shooting glasses, the Collaborative Edition of the glasses will be launched at a later date. Meta: Meta's smart glasses, a joint venture with Ray-Ban, have become best-selling products in 60% of Ray-Ban stores in Europe, the Middle East, and Africa (EMEA). In October 2024, the MetaView application (Meta smart glasses application) saw a 200%+ year-on-year growth in downloads. Meta plans to integrate displays into its MetaRay-Ban smart glasses earlier in 2025. Supply side: On the basis of maintaining cooperation with a complete machine supplier in Dongguan, a new supplier based in Shandong has been successfully introduced. The capacity expansion of AI glasses is underway, with plans to start production in 2025 Q1. The SHENZHEN INT'L Glasses (smart wearable) design competition finals began on December 26, and the Shenzhen Lightviso Expo will be held from December 27-29. Glasses have become a new "lipstick" category for luxury brands, with the collision effect of fashion and technology accelerating evolution The fashion concept of glasses is evolving, pursuing the ultimate experience of integrating functionality and aesthetics: German luxury glasses brand Lotos, Danish luxury glasses brand Lindberg lead the elite and professional atmosphere, Oakley and RudyProject glasses focus on sports functionality, collaborations such as Ray-Ban x Saint Laurent, Mugler x GentleMonster are highly sought after, and the smart glasses jointly launched by Meta and Ray-Ban are designed to be closer to the classic style of sunglasses. Sports, smart glasses are also given more fashion potential. In 2024, glasses became a counter-cyclical category for luxury brands: European glasses giant EssilorLuxottica's revenue for the first 9 months of the 2024 fiscal year increased by 4.9% year-on-year to 19.727 billion euros. Kering's glasses division saw a 4% increase in revenue in the third quarter of the 2024 fiscal year (on a comparable basis), performing better than other divisions of the group. ResearchAndMarkets predicts that the global luxury glasses market will grow from $34.76 billion in 2024 to $40.84 billion in 2030, with a CAGR of 3%. AI glasses are expected to become a new "lipstick" category for luxury brands. Luxury goods groups are increasing their investment in the glasses business to drive group growth: Taking LVMH and Kering Group as examples, to better control the tone of the glasses business, they will retain 100% of the revenue and profits generated by the glasses business, bringing the glasses business under self-ownership, horizontally acquiring/investing in niche professional brands, and vertically integrating the industry chain. In the first half of 2024, Thlios (a joint venture under LVMH) achieved double-digit growth; Kering Eyewear had a revenue of over 1 billion euros in 2022/2023, and in the first half of the 2024 fiscal year, the revenue had reached 914 million euros, with an operating profit of 196 million euros. Increased research and development and channel efforts are empowering the volume of AI glasses, accelerating the breakthrough of smart glasses Channel side: Doctorglasses Chain has cooperated with brands such as Star Gee Meizu, Raybird Innovation, Jiehuan, Liweike, Rokid, and Xreal to deliver AI smart glasses. R&D and production side: Emdoor Information has released a full-chain solution for AI glasses, continuously empowering customers to expand multi-application scenarios, with large-scale production expected in 2025. In the first half of 2024, XR and AIoT businesses of Emdoor Information achieved a revenue of 144 million yuan, up 266% year-on-year. Cosonic Intelligent Technologies has complete integration capabilities for the AI glasses industry chain, producing consumer-grade AR glasses for Impact Technology. Benefitting targets: Doctorglasses Chain (300622.SH), Shenzhen KTC Technology (001308.SZ), Cosonic Intelligent Technologies (300793.SZ), Emdoor Information (001314.SZ). Risk warning: Technological breakthroughs falling short of expectations, intensifying market competition, lower-than-expected downstream demand, etc.