1、M FoundationShanghai Conant Optical Co Ltd|Asia PacificSharp Focus on Smart Eyewear InnovationAs a leading optical lens player,we believe Conant is well positioned to capture the AR/AI glasses opportunity,which could be a key positive driver in the next few years.We initiate coverage at Equal-weight

2、 with a price target of HK$50.Top optical lens player in China,with a global footprint:Conant is a leading resin spectacle lens manufacturer serving not just clients in China but customers in over 80 countries,including the US,Japan,India,Australia,Thailand,Germany,and Brazil.To meet rising demand,C

3、onant has a rolling production capacity expansion plan with new sites located in Japan and Thailand.In the future,we expect Conant to further expand capacity and gain market share globally.Strategic partnership with Goertek to capture AR/AI glasses opportunity:In January 2025,Goertek acquired 20.03%

4、of Shanghai Conant Optical and established a strategic partnership to leverage Conants expertise in lens manufacturing to advance its ambitions in the AR/AI glasses market.Such vertical integration should help Goertek secure a reliable supply of high-quality optical components essential for AR/AI gl

5、asses.Meanwhile,thanks to Goerteks leading profile in AR/AI glasses,Conant can also leverage this partnership to integrate more seamlessly with Goerteks products and systems,which could offer better access to leading global AR/AI glasses companies and reach new overseas customers.New product innovat

6、ion and better mix to boost margins:We believe Conant will be able to capture the AR/AI glasses opportunity as the company acted early to conduct joint R&D with a number of leading global technology and consumer electronics companies.Given AR/AI glasses lenses have a much higher ASP than traditional