Zheshang Securities initiated coverage on CONANT OPTICAL (02276), assigning a "Buy" rating, citing its position as a global leader in optical resin lenses. The company has seen rapid growth in its proprietary brands domestically and internationally, with clear product upgrade trends and early-mover advantages in the smart eyewear segment.

Founded in 1996 as an OEM for international brands, CONANT OPTICAL began transitioning to proprietary brands in 2013, which now serve as its primary growth driver. Key financial highlights include H1 2025 revenue of RMB 1.084 billion (+11.0% YoY) and net profit attributable to shareholders of RMB 273 million (+30.7% YoY), reflecting strong profitability as functional and customized lenses contribute more to revenue.

**Optical Lens Business** The global lens market, valued at hundreds of billions, continues steady growth. According to Frost & Sullivan, the retail value of the global eyewear lens market reached $54.3 billion in 2024 (+8.4% YoY), with factory sales at $6.2 billion (+6.9% YoY), driven by rising consumer demand for quality and functionality. By volume, Essilor led with 400 million units sold in 2024, while CONANT OPTICAL ranked second with 180 million units. In terms of sales value, Essilor remained the top brand ($10–12 billion), with CONANT OPTICAL as the only Chinese company in the top five.

**Smart Eyewear Business** AI-driven innovation is accelerating product upgrades, with potential for both volume and price growth in lenses. Global AI glasses sales reached 3.12 million units in Q1–Q3 2025, led by Ray-Ban Meta, while AR glasses sales hit 560,000 units. Current smart eyewear solutions for myopia include: 1. **Clip-on lenses** (still mainstream), evolving toward flatter and thinner designs. 2. **Integrated solutions** under development by major players, offering lighter wearability. As smart eyewear adoption grows, lens manufacturers stand to gain in market share and average selling prices (ASP).

**Competitive Strengths** CONANT OPTICAL’s differentiated SKU matrix and efficient C2M (customer-to-manufacturer) service drive proprietary brand growth. Its customized lens production capabilities and R&D expertise position it well in smart eyewear. Domestically, the company meets niche demands with high-barrier 1.74-index lens production, while internationally, its C2M model and global capacity enhance competitiveness. Its reputation as the world’s largest lens manufacturer, coupled with integrated R&D and partnerships with major tech firms, strengthens its foothold in smart eyewear.

**Risks** Potential risks include unexpected tariff fluctuations, weaker-than-expected downstream demand, and delays in smart eyewear collaborations.