Incident: On July 29, MYVU smart glasses entered the Hainan Duty Free Shop Dr. Glasses, which can meet functions such as real-time translation and intelligent navigation. Dr. Glasses cooperates deeply with MYVU to solve the “last mile of AR glasses” needs in one stop by providing professional eyewear services and sales channels. Myopia lenses are the core part of smart glasses implementation. Large-scale eyewear channel providers have significant advantages in smart glasses front-end design, pre-sales display and experience, online and offline sales channels, and after-sales service.

Forward-looking smart glasses have been laid out, and strategic partnerships have blossomed everywhere. As one of the earliest eyewear retailers with AR glasses, Dr. Glasses operates in 24 provinces, autonomous regions, and municipalities across the country. It has established joint ventures with shopping malls, supermarkets and other channels to establish optometry centers, and has cooperated with hospitals to set up optometry centers. The channel advantage is obvious.

With the number of stores nationwide and professional eyewear services, the company has now reached cooperation with many AR glasses players such as Thunderbird, Meizu, Li Weike, Huawei, and Rokid, mainly providing online glasses services and offline channel networks. In March 2023, the company became a strategic investor in Thunderbird innovation and increased the smart glasses circuit.

Technological innovation drives growth, and domestic companies lead the world. According to Wellsenn XR data, global AR equipment shipments in 2023 and China were 0.51/0.2 million units, respectively, +37.8%/+53.8%, respectively. At the same time, the share of C-side sales increased year by year, reaching 78.4% in 2023, and global AR equipment shipments are expected to reach 5 million units in 2027. The PhD is forward-looking to lay out the smart glasses circuit, leading in product, channel and customer layout, and is expected to fully benefit from the development dividends of the smart glasses industry in the future.

In addition, demand for glasses is becoming abundant, consumption channels are being upgraded, and the degree of specialization is increasing. Demand for digital glasses, color-changing glasses, myopia prevention and control glasses for young people, and progressive glasses for the elderly is strong. The ability to customize lenses will be a winner or loser in the future development stage of eyewear companies.

Profit forecast and investment rating: We expect the company's net profit to be 0.14 billion yuan, 0.17 billion yuan, and 0.2 billion yuan respectively in 2024-2026, and the corresponding PE is 18.6X, 15.4X, and 13.4X, respectively, maintaining a “buy” rating.

Risk warning: Risk of macroeconomic environment fluctuations, increased industry competition, and franchise expansion falling short of expectations.