"Big Banks" Citigroup: CONANT OPTICAL's earnings surprise meets expectations, raising target price to 70 yuan

Citigroup's research report indicates that CONANT OPTICAL (02276.HK) has issued a positive profit alert, expecting a net profit growth of no less than 30% year-on-year in 2025, consistent with the bank's forecast of a 30% increase. The driving factors include the increased sales contribution from 1.74 refractive index lenses and other multifunctional products, expanded economies of scale, improved automation levels, as well as decreased financing costs and enhanced capital returns.

The bank has raised its earnings per share forecasts for CONANT OPTICAL for 2025 to 2027 by 3%, 1%, and 1% respectively, to reflect the higher contribution from 1.74 refractive index lens products and lower financing costs. The target price has been raised from HKD 65 to HKD 70, reiterating a "Buy/High Risk" rating, as the company is one of the main beneficiaries of artificial intelligence glasses. Short-term catalysts include the upcoming launch of Amazon (AMZN.US) artificial intelligence glasses and related supply chain updates