Smart glasses, many of which contain components made in China, are emerging as an emerging category as the consumer tech season begins in the fall. The glasses are a simpler version of Apple’s pricey Vision Pro headsets, not to mention the sophisticated technology required for virtual reality headsets. Snap has unveiled its augmented reality glasses; Meta is expected to do so at its own event starting Sept. 25. Facebook parent company Ray-Ban Meta’s smart glasses are already seeing momentum, Frank He, head of technology hardware research for China equities at HSBC, noted in a report earlier this month. The second generation of those smart glasses sold more than 1 million units in the first half of this year, compared with 300,000 for the first generation from September 2021 to February 2023, He said, based on HSBC’s research. Acceptance struggle Similar wearables, like Google Glass (which was discontinued in early 2023), have struggled to gain widespread acceptance beyond a niche audience. “We believe the tipping point may be near, due to the coming proliferation of AI assistants/agents,” he said, noting that one of HSBC’s buy-rated picks to play on the trend is Hong Kong-listed Sunny Optical. “We also like Sunny for its leading expertise in wearable optics, and believe it will benefit from higher-than-expected demand for Ray-Ban smart glasses over the next two years,” the analyst said. “In our base case, we estimate Sunny smart glasses shipments (non-smartphone camera module) to reach 2 million and 5 million units in 2024-25 (at a content value of around $8-10), respectively, with further upside potential from partnerships with other OEMs, such as Xiaomi,” the HSBC report said. Sunny Optical is a China-based supplier of products from cars to microscopes. The company also has factories in Vietnam and India, according to an investor presentation. But CMB International analysts said in August that first-half revenue in Europe and the U.S. grew 32% and 15%, respectively, “implying strong sales from … European automakers and Apple/Meta VR in the U.S.” Ray-Ban Meta’s smart glasses, which cost about $300, allow users to take photos and short videos, listen to music and interact with Meta’s AI features, according to promotional materials. Shipments of the optical company’s non-smart camera modules rose about 61% year-over-year through July, which HSBC attributes to “robust sales” of Ray-Ban Meta smart glasses. HSBC has a price target of HK$58.90 ($7.56) on Sunny Optical, implying an upside of about 30% from Friday’s close. The bank upgraded Sunny to buy in late August. However, Sunny Optical remains sensitive to the highly competitive smartphone and auto markets. JPMorgan analysts were less bullish in mid-August, after Sunny Optical reported first-half earnings. “While we also believe the worst of Sunny Optical’s fundamentals has passed and its recovery is on track, we remain neutral,” JPMorgan said, citing slower growth than its peers in the high-end smartphone business and lower growth in the vehicle business. JPMorgan has a price target of HK$55. — CNBC’s Michael Bloom contributed to this report.
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This Chinese Stock Is Soaring on Smart Glasses in the US
