Core Viewpoint - Guosen Securities initiates coverage on Kangnait Optical (02276) with an "Outperform" rating, highlighting growth in traditional business and XR segment, projecting net profit for 2025-2027 at 540/660/830 million RMB with growth rates of 25.6%/22.1%/26.9% [1] Company Overview - Kangnait Optical specializes in the research and sales of optical lenses, entering the XR glasses market, and is a leading global provider of optical lenses, offering standardized and customized products to downstream lens brands and end-users [2] - The company is expected to achieve a revenue CAGR of 15% and a profit CAGR of 33% from 2021 to 2024 [2] Industry Insights - The traditional lens industry is projected to have a global retail revenue of $54.3 billion in 2024, with a compound annual growth rate (CAGR) of approximately 4.7% from 2019 to 2024 [3] - The domestic lens shipment volume is estimated at 940 million pairs annually, while global sales are around 1.7 billion pairs [3] - The AI glasses market is nascent, with an expected global sales volume of 2.83 million pairs in 2024, indicating a penetration rate of only 0.2% [3] - If AI glasses penetration increases to 10% over the next five years, sales could reach approximately 16 million pairs [3] Competitive Landscape - Kangnait Optical ranks second in global resin lens sales volume and fifth in sales revenue in 2024, being one of the few manufacturers capable of mass-producing high-refractive index lenses [4] - The company has established strong relationships with international brand clients and has increased the proportion of high-end products and its own brand, driving structural growth in revenue and profitability [4] - Kangnait Optical is positioned to capture significant market share in the AI glasses segment, having secured exclusive lens supply for Alibaba's Quark AI glasses set to launch in October 2025 [4]