Huachuang Securities: Maintaining Connett Optics' (02276) “Strong” Rating Target Price of HK$63.63

The Zhitong Finance App learned that Huachuang Securities released a research report saying that Connett Optics (02276) is deeply involved in the eyewear manufacturing industry, domestic and foreign sales go hand in hand, and structural upgrades are expected to drive continuous improvement in profitability. At present, the company has cooperated with a number of leading 3C leaders to lay out smart glasses, and growth can be expected. Considering the accelerated development of the smart glasses industry chain and the steady improvement of the company's product structure, the bank expects the company's net profit to be 5.6/7.0/870 million yuan in 25-27 years, respectively, and the corresponding PE is 41/34/27X. Referring to comparable company valuations, the 26-year valuation was 40X, the target price was maintained at HK$63.63, and the “strong push” rating was maintained.

The main views of Huachuang Securities are as follows:

Matters: On December 30, '25, the National Development and Reform Commission and the Ministry of Finance issued the 2026 national supplement policy. For the first time, smart glasses were included in the scope of the subsidy. The subsidy standard is 15%, and the maximum subsidy for a single item is 500 yuan (the price of a single product is not more than 6,000 yuan). According to estimates, smart glasses that cost more than 3,300 yuan can basically enjoy the full amount of state subsidies.

Lowering the purchase threshold to accelerate market penetration

Judging from the Tmall Shuang11 XR device best-selling list, products under 4,000 yuan account for more than half of the top 20 best-selling products, and the prices of mainstream AI/AR eyewear products basically meet the national supplement requirements (the price is basically no more than 6,000 yuan). The bank believes that the drop in product prices after the subsidy is expected to further leverage the increase in C-side demand and continue to be optimistic about the increase in the penetration rate of smart glasses next year.

CES is approaching, keep an eye on subsequent new product developments

The 2026 International Consumer Electronics Show (CES) will be held in North America from January 6 to 9. According to preliminary VR gyroscope statistics, there are more than 50 AI glasses exhibitors at this year's CES. Domestic and foreign manufacturers are concentrating on releasing/showcasing new products and reference designs, and category education and mental occupation have accelerated markedly. Looking at the industrial chain level, with technological iteration and the promotion of new products, the supply side and the ecological side are expected to enter the fast track of development, which will resonate with the national supplement in “supply prosperity+demand stimulation”. It is recommended to continue to pay attention to the pace of subsequent new product promotion.

Positive feedback from domestic benchmark customers, continuing to be optimistic about the volume of consumer-grade products

Connett is the exclusive lens supplier for Quark AI glasses. Taking the S1 as an example, the price of a lens with a refractive index of 1.60/1.67/1.74 is 719/899/1,529 yuan higher than that of a flat lens. Looking at the medium to long term, the company's XR business has a clear first-mover advantage and high technical barriers. It is expected to strengthen its competitive advantage in the process of promoting the new industrial chain and continue to be optimistic about the company's supply chain card position.

Risk warning: The development of smart glasses falls short of expectations, domestic channel expansion falls short of expectations, and industry competition intensifies.