Guotai Haitong Securities has issued a research report maintaining an "Overweight" rating on CONANT OPTICAL (02276) with a target price of HK$74.3. The firm anticipates the company will benefit from the development trend of smart glasses and ongoing product mix optimization. Guotai Haitong forecasts CONANT OPTICAL's net profit attributable to parent company for 2025-2027 to be RMB 560 million, RMB 710 million, and RMB 870 million, representing growth rates of 31%, 25%, and 23%, respectively. Based on comparable company valuations, the report assigns CONANT OPTICAL a 48x P/E ratio for 2026. Key points from Guotai Haitong Securities are as follows:

The U.S. Supreme Court ruled on the morning of February 20 that tariffs previously imposed by the Trump administration under IEEPA were unlawful. The court voted 6-3, determining that the authority granted to the President by IEEPA to regulate imports does not equate to the power to levy taxes, which is a constitutional power reserved for Congress. On the afternoon of February 20, former President Trump held a press conference criticizing the Supreme Court and signed a new executive order. This order intends to utilize Section 122 of the Trade Act of 1974 to impose a temporary 10% tariff (later adjusted to 15%, the maximum allowed under the clause) on all global imports, effective from February 24. The maximum duration for this temporary tariff is 150 days.

Tariff pressure is expected to ease, and potential refunds could boost profits. Currently, U.S. tariffs on Chinese goods consist of four overlapping categories: Section 301 tariffs, Section 232 tariffs, Section 122 tariffs, and specific punitive tariffs. The recent ruling has a structural impact on these tariffs. Following the removal of the specific punitive tariffs under IEEPA (totaling 20%, including reciprocal and fentanyl tariffs), the new administration has added a Section 122 tariff of 15%. Given that the U.S. market accounted for 13% of CONANT OPTICAL's revenue in 2024, this development is expected to alleviate tariff pressure. Furthermore, the Section 122 tariff is constrained by statutory limits, capped at 15% with a maximum validity period of only 150 days. Additionally, the ruling mentioned that previously paid tariffs under the invalidated measures may be subject to refunds. If CONANT OPTICAL can recover these previously paid tariffs, it would directly enhance its net profit for 2026.

CONANT OPTICAL's business remains solid, positioning it to continue benefiting from growth opportunities. In January 2026, the company completed a placement raising HK$1.4 billion. The funds are allocated for mass production lines and the procurement of measurement and inspection equipment for XR-related businesses (40%), establishing a precision optical support center (20%), and expanding XR-related capacity and smart manufacturing capabilities at its Thailand factory (20%), among other uses. With new products continuously being launched in the smart glasses industry, creating ongoing catalysts, and the company's core operations remaining stable, CONANT OPTICAL is well-positioned to reap further growth benefits.

Risk factors include potential slower-than-expected progress in custom lens and proprietary brand initiatives, slower development of the smart glasses lens business, and intensifying industry competition.