Key points of investment
According to the official website of the enterprise investigation, Zhishang Technology's utility model patent for wearable devices was authorized on June 21, 2024, with the authorization notice number CN221200108U.
It is used on wearable devices on the head to achieve functions such as comfortable wearing/automatic adjustment. The inventors of the latest headset patents announced by Zhishang Technology are Lei Qiaoping, Hu Wentao, and Chen Chaoxian. The patent shows that the wearable device includes a display host, a head-mounted holder, and an adjustment mechanism; one end of the head-mounted holder is rotatably connected to the display host, and the other end is used to support the position of the back of the user's head; the adjustment mechanism includes a circuit board and a driving component; the circuit board is placed on the display host, the driving component is electrically connected to the circuit board, and the driving component is driven to drive the other end of the headset holder closer to or away from the display host. The utility model technical scheme realizes a comfortable fit and automatic adjustment of the helmet, and the adjustment is quick and effective.
Comfort is the main consideration for headsets, and helmet/glasses/suspension methods have their own advantages and disadvantages. (1) Helmet-style design: Generally composed of two or more headbands, formed into a helmet type, the top and circumference of the head are supported together. Typical products include HTC VIVE, Oculus, etc. The advantage of helmet-style wear is that it has many support surfaces, balanced stress, and is easy to fix; the disadvantage is that it is not beautiful in appearance, has many parts, and is complicated in structure, which is very inconvenient for users to wear and not easy to store.
(2) Glasses design: In other words, the design of the headset uses a similar eyeglass wearing scheme. The circumference of the head, bridge of the nose, and part also require orbital stress to fix the headset. Typical products include Magic Leap, Hololens, etc. This type of design is the one that looks more intuitive and beautiful in headsets at the cost of wearing comfort. The face of the human body, especially the bridge of the nose and eye orifice, is a stress-sensitive area, and the stress area of the face is usually small, and the long-term stress is strong. (3) Suspended design: Usually applied by a headband and fixed to the head by hanging. It is usually stressed by the forehead. The structure is stable, the design is simple, and it is more convenient to wear. Representative products include GOOVIS mobile 3D cinema, SONY Playstation VR (PSVR), etc. To balance comfort, beauty and portability, the hanging design must control the forehead support area and headband size. This also greatly increases the difficulty of product design. There are two main points: one is that the main body weight of the headset should be light enough to prevent the headband from falling and compressing the bridge of the nose or cheeks, and the other is that the headband design requirements are high. How to use ergonomic design to maximize the difficulty of wearing comfort. According to the patent disclosure, this component of Zhishang Technology may be designed for helmet-style wear. Unlike traditional helmet-style headsets, the company's helmet-style solutions include automatic adjustment of components such as circuit boards and driving components, which can be adjusted automatically to ensure comfort adjustment.
Mate added Quest orders, and 24-25 is expected to be a year of VR sales. According to Wellsenn XR data, global VR sales in Q1 2024 were 1.72 million units, down 9% year on year. The main reason for the decline in sales in the first quarter was mainly due to Meta, Sony PS VR2, and PICO. Among them, Meta sales fell 10%, Sony PS VR2 fell 57%, and Apple Vision Pro sold 290,000 units in the first quarter, partially compensating for the decline in sales of Meta, Sony PS VR2, and PICO. In the first quarter, Meta added Quest orders to upstream supply chain companies, including Quest Pro, Quest 3, and Quest 2 upgraded Quest 3 S (Lite), which is expected to be sold in the fourth quarter. Meta's annual sales volume is expected to exceed 6 million units in 2024. Global VR devices are expected to achieve sales volume of 8.44 million units in 2024, an increase of 12% over 2023. In 2024, the VR market will reverse the declining sales trend of the past two years and return to a positive growth trajectory, but the VR industry will still be in a small year of sales this year and next.
Investment advice: We maintain the company's profit forecast. From 2024 to 2026, we expect revenue of 707/9.06/1,244 billion yuan, with growth rates of 40.8%/28.2%/37.3%, respectively; net profit to mother of 0.81/0.98/149 million yuan, growth rates of 11.2%/20.5%/52.3%, respectively; corresponding PE is 71.2/59.1/38.8 times, respectively. Considering that the company's products have entered Switch/Sony's PS Series/Meta Quest under Switch/Sony, a well-known Japanese company, game and XR development is expected to drive the growth of the company's game console components. Combined with its participation in Fukeshima's leading position in the MT plug-in field, AI development and “new infrastructure” construction provide growth momentum for the company's performance. Maintain an “Accumulated Holding-A” rating.
Risk warning: Single customer dependency and customer terminal product life cycle risk; risk of high customer concentration; risk of new business growth; failure to effectively absorb risk in fund-raising project production capacity.