Maintain an “Overweight” rating. We maintained the company's 2024-2025 EPS of 0.57/0.72 yuan, added the company's 2026 EPS forecast of 0.86 yuan, maintained the company's 2024 30x PE valuation level, maintained the target price of 17.1 yuan, and maintained an increase in holdings rating.

The performance was basically in line with expectations, and leading optical companies showed their resilience in development. The company released its 2023 annual report. In 2023, the company achieved operating income of 5,076 billion yuan, net profit to mother of 60 billion yuan, +4.15% year over year; 23Q4 company achieved operating income of 1,527 billion yuan, +30.05% year over year, and net profit to mother 162 million yuan, +68.83% year over year. The optical components, thin-film optical panels, automotive electronics and other sectors have all grown to varying degrees. Among them, optical components have benefited from mass production of microprism modules from major customers and increased penetration rate of absorption and reflection composite filters. The thin-film optical panel business has further increased customer share and increased product yield, and the automotive sector has the largest share of AR-HUD shipments in the domestic market.

The three major sectors of consumer electronics, automotive optoelectronics, and metaverse optics are gradually opening up room for growth.

In the consumer electronics sector, the penetration rate of periscope telephoto lenses and absorptive reflection composite filters will continue to increase the company's growth in the consumer electronics field; in automotive optoelectronics, the company currently has a card position advantage in the domestic AR-HUD field, and the technology and market share are at the leading level in the country; in the metaverse sector, the company has been working in depth with LUMUS, and has a layout in the fields of reflected light waveguide and diffractive light waveguide, which will continue to benefit the development of the industry.

Catalysts: Increased penetration rate of periscope telephoto lenses; further increase in the company's gross margin.

Risk warning: Consumer electronics industry recovery falls short of expectations; industry competition intensifies.