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Smart glasses are becoming a popular trend in consumer technology, with many components being manufactured in China. These glasses are a more affordable alternative to high-end products like Apple’s Vision Pro and virtual reality headsets. Companies like Snap and Meta are entering the market with augmented reality glasses, with Meta’s Ray-Ban Meta Smart Glasses already gaining traction. According to HSBC research, the second generation of smart glasses sold over 1 million units in the first half of this year, a significant increase from the first generation.

Despite past struggles of wearables like Google Glass, HSBC analysts believe that the industry may be on the verge of a turning point, driven by the increasing presence of AI assistants. One company poised to benefit from this trend is Hong Kong-listed Sunny Optical, known for its expertise in optics for wearable devices. HSBC projects that Sunny’s smart glasses shipments will continue to grow, with potential collaborations with other OEMs like Xiaomi.

Sunny Optical, a China-based supplier with factories in Vietnam and India, has seen strong revenue growth in Europe and the U.S., attributed to sales to European automakers and companies like Apple and Meta in the VR space. Their Ray-Ban Meta smart glasses, priced at around $300, offer various features such as taking pictures, listening to music, and interacting with AI technologies.

HSBC has a positive outlook on Sunny Optical, with a price target suggesting a 30% upside potential. While the company faces competition in the smartphone and automotive markets, analysts believe that its recovery is on track. JPMorgan, however, remains cautious, citing slower growth compared to peers in high-end smartphone products and the vehicle business.

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