Cinda: Model iteration assists in boosting product strength, projected to double or more in growth over the next 25 years for AI glasses.

Cinda released a research report stating that in the 25-year investment cycle, attention should be paid to the following: 1) Xiaomi's AI glasses product is expected to be launched, potentially expanding its market in China; 2) Core products of 25H1 have been released with actual sales figures; 3) Meta's two new smart glasses products for the 25-year period (sports glasses and Rayban Meta third generation); 4) Breakthrough in iterative AI models slope. It is recommended to pay attention to CONANT OPTICAL (02276) with excellent lens customization capabilities, more contact with international and domestic major clients, and continuous breakthroughs in technology iteration; Impulse (Qingdao) Health Tech (002899.SZ) which partners with leading smart glasses players to develop sports-related products and expand into sports cycling business; Mingyue Optical Lens (301101.SZ) with leading lens production capabilities and collaboration with top 3C manufacturers; Doctorglasses Chain (300622.SZ) which is gradually expanding towards the product end after establishing a joint venture with Rockbird and jointly developing products. Key viewpoints from Cinda are as follows: Optimistic guidance from Rayban Meta indicates a potential doubling of consumer levels. According to the disclosed information from EssilorLuxottica (Rayban's parent company), Rayban Meta smart glasses have sold a cumulative total of 2 million units since their launch, with production capacity planned to increase to 10 million units by 2026. With the release of dozens of new products in the industry every 25 years and simultaneous optimization of software and hardware, innovation in product functions, and iterative supply creating demand, the industry is expected to reach a turning point towards growth. The long-term potential space for hundreds of millions of units, the sector is expected to continue to grow by double digits in AI glasses over the 25-year period, with AR glasses sales slightly lagging behind. 1) AI Glasses: According to WellsennXR, global AI glasses sales in 2024 reached 2.34 million units (with 50,000 units in China), with RayBan Meta sales reaching 2.24 million units. The launch dates for other AI glasses new products mostly fall in the 25-year period. WellsennXR predicts a 135% year-on-year growth in global AI smart glasses sales to reach 5.5 million units by 2025. 2) AR Glasses: According to WellsennXR, global/Chinese shipments of AR devices in 2023 were 500,000 and 200,000 units, respectively; global AR device shipments reached 500,000 units in 2024. Currently, the consumer base remains limited, the ecosystem is still under development, and upstream supply chain capabilities need to be improved, coupled with high costs, demand has not yet reached a tipping point. Looking ahead, with upgrades in smart glasses display technology, hardware costs falling, and a more diverse SKU range, a growth turning point is expected. WellsennXR predicts global AR glasses shipments to reach 1.5 million units by 2027. 3) Long-term space: With 1.2 billion smartwatch users, 4.3 billion smartphone users, and 2.2 billion vision-impaired people, assuming a reasonable penetration rate, the potential space for smart glasses could reach around 1 billion units, with a gradual increase in market share in China. The current direction of smart glasses development relies on AI model iteration. The report lists recent products as follows: 1) Xiaomi: Xiaomi's AI glasses product is expected to be released, leveraging its channel strength through online e-commerce and offline Xiaomi stores, and the AI glasses are expected to connect with Xiaomi smartphones, cars, smart homes, etc., forming a full-scene link between "people-cars-homes". Compared to previous niche functional products, Xiaomi AI glasses are expected to drive domestic market expansion. 2) Three major telecom operators and smartphone manufacturers: China Telecom Corporation plans to launch an AI glasses priced at below 2,000 yuan in May 2025; China Mobile Limited has also started its layout in the AI glasses field and is looking forward to its application prospects in education, healthcare, industrial sectors, etc.; China United Network Communications and its partner's eSIM AI sports glasses officially launched in 24H2. In addition, Transsion's first AI glasses are also set to debut. BeanPacker, DeepSeek, and overseas large model rapid iterations breakthroughs, Alibaba and Tencent are reshaping the AI model application ecosystem. According to Caixin, Apple is partnering with Alibaba to develop and launch AI features for Chinese iPhone users; WeChat Search is officially testing the integration of DeepSeek in its AI search while calling on the mixed meta-model; on February 16th, Musk stated that the latest large model Grok3 would be launched at 12 p.m. on February 18th Beijing time. As the industry's core barriers shift from models and infrastructure to hardware and applications, the innovation capabilities of Chinese products within the global perspective are beyond doubt. Risk warning: Lower-than-expected downstream demand, cooperation not meeting expectations.