Huaxi: First coverage of CONANT OPTICAL (02276) with a "buy" rating, empowering smart glasses for new growth.

Huaxi research report states that CONANT OPTICAL (02276) has deep ties with core business partners in the upstream and downstream of lens manufacturing and has a prominent advantage in the C2M manufacturing model. In addition, in the field of smart glasses, CONANT OPTICAL has a deep position in the overseas leading manufacturers' core supply chain, enjoying a relatively high valuation premium compared to peers. The report gives a "buy" rating for the first time, selecting Ningbo Yong Xin Optics and Mingyue Optical Lens, as comparable companies in the AI glasses field. Huaxi's main points are as follows: Deep cultivation in resin lens manufacturing, with impressive performance growth since its listing CONANT OPTICAL, formerly known as Shanghai CONANT OPTICAL Co., Ltd., has been focusing on the research, manufacturing, and sales of resin lenses since its establishment in 1996. After capital restructuring and spin-off, it independently listed on the main board of the Hong Kong Stock Exchange in 2021. In 2023, the company ranked among the top five global resin lens sales enterprises, and was the only Chinese company among the top five. Since its listing, the company's revenue has grown at a compound annual growth rate of 15%, and its adjusted net profit attributable to shareholders has grown at a compound annual growth rate of 35%. Global optical industry has been in a quality race of steady expansion, with strong demand and continuous expansion of consumer base According to Sullivan's statistics, the global factory sales of optical lens manufacturers are expected to increase from $52 billion in 2019 to $62 billion in 2024, with a compound annual growth rate of approximately 3.6%. It is projected to expand to $82 billion by 2029, with a faster compound growth rate of 5.8%, as the optical industry diversifies and functions improve. While traditional optical demand continues to grow steadily, new categories like AI smart glasses are accelerating market entry, with product forms and wearing experiences continuously optimizing. According to Wellsenn's statistics, global sales of AI smart glasses exceeded 3 million pairs in the first three quarters of 2025 and are expected to reach 90 million pairs by 2030. The company's advantage in lens manufacturing is apparent, with a focus on core segments (1) As a leading global resin lens manufacturer, the company has a technological and capacity advantage in high refractive index lens, stable core material supply, over 7 million SKU product network, rich and complete product matrix, and outstanding scale and product capabilities; (2) By utilizing the C2M custom model to achieve quick responses for small orders within 2-3 days, the company has built strong barriers in profitability and efficiency; (3) Looking ahead, the company aims to strategically position itself in the optical core segment of smart glasses, collaborating with Goertek Inc. to deeply integrate the global XR industry chain and tying closely with overseas tech leaders and domestic top brands. With a global customer structure, the company is expected to fully benefit from the future growth of the smart glasses industry, opening a second growth curve. Deep cultivation in the optical lens track with clear advantages, promising future growth It is estimated that the company's revenue for 2026-2028 will be 25.83/30.21/34.94 billion yuan, with growth rates of 18.1%/17.0%/15.7%; net profit attributable to shareholders will be 7.07/8.65/10.28 billion yuan, with growth rates of 27%/22%/19%; EPS will be 1.40/1.71/2.04 yuan, corresponding to a closing price of HKD 44.4 per share on May 12, 2026/5/12, calculated at an exchange rate of HKD:CNY=1:0.87 on May 12. The PE ratios will be 28X, 23X, and 19X respectively. Risk warning: Overseas demand lower than expected, global trade barriers rising, and slower than expected progress in smart glasses business.