Xiangcai Securities: Opening up consumer-level brain-computer interface market space with multiple scenario needs, giving a "buy" rating to relevant track.

Shanxi Securities released a research report stating that in the field of consumption, it is optimistic about the brain-machine interface related devices opening up a larger consumer market space under the drive of technological breakthroughs, and focuses on products that can effectively solve specific health problems such as sleep, anxiety, and fatigue. It gives a "buy" rating to the consumer track related to brain-machine interface, and recommends focusing on: (1) Short-term focus: Prioritize terminal device manufacturers that have achieved mass production of consumer-grade BCI products, have clear income contributions, and have the ability to mass ship, these companies will be the first to enjoy the dividends of industry scale commercialization, with strong performance realization capabilities. (2) Medium-term focus: Pay attention to leading enterprises in the upstream core components that have domestic alternatives and core AI decoding algorithm capabilities, these enterprises have industry core barriers and will occupy long-term competitive advantages in the industry's scale popularization. (3) Long-term focus: Optimistic about industry-leading enterprises with complete industry chain layout and perfect scene ecology in the human-machine interaction industry. Shanxi Securities' main points are as follows: The market expansion of brain-machine interfaces for consumers is in its early stages. As a direct communication channel connecting the human brain to external devices, Brain-Computer Interface (BCI) technology is experiencing a key stage of transition from laboratory research to industrial application. However, despite the initial success of clinical applications in the medical rehabilitation field, the landing of the consumer market faces multiple challenges such as technological maturity, ethical regulation, cost control, and validation of real demand. Brain-machine interface technology is in the early stage of transition from medical to consumer. Non-invasive technology is relatively mature, but limited by signal quality, application scenarios are limited; invasive technology has strong performance, but the safety and ethical thresholds are very high. In the short term, consumer-grade products will mainly be based on non-invasive EEG technology. Strict regulation and policy dividends run in parallel. Different regions have different policy attitudes. In terms of regulation, China has strict review policies, but there are also many policy dividends. In recent years, various departments in China have successively issued policies to support and regulate the development of the brain-machine interface industry, involving brain science research, breakthroughs in brain-machine interface technology, and application research. Policy support for the industry's standardized development. Attention should be paid to enterprises that can effectively reduce calibration costs and improve signal stability within a compliant framework. Diversification of consumption scenarios, focusing on real market demands. By 2023, non-medical industries such as consumer, industrial, and education will account for approximately 44% of downstream solution companies in the Chinese brain-machine interface industry. The short-term volume of consumer scenarios is relatively small, but the long-term explosive elasticity is optimistic. In the consumption field, brain-machine interface is currently in the stage of distinguishing truth from falsehood. Focus on scenarios with clear pain points and payment willingness such as sleep health, occupational safety, and rehabilitation assistance. Non-invasive methods are the only feasible path for consumers, but be wary of the risks of product homogeneity and poor user experience. Risk warnings: (1) Risks of technological research and development falling short of expectations; (2) Risks of regulatory policy changes; (3) Risks of commercialization falling short of expectations; (4) Risks of increased market competition; (5) Ethical risks; (6) Risks of macroeconomic fluctuations.