Industry perspective
Brand trend: on August 29, byteco spent 9 billion yuan to acquire Pico, a Chinese VR hardware company. Pico is the leader in China's VR industry, accounting for 38% of Q4 in 2020. On October 28, Facebook was renamed meta to build a meta universe platform in the future. On December 14, oppo released a new generation of smart glasses air glass, which weighs only 30g. It is the lightest monocular waveguide glasses in the industry. From December 25 to 28, oculus, a VR application of meta, jumped to the top of the list of free applications in the United States of Apple App store, ranking among the top five in 14 countries / regions. Major global giants have increased the R & D of AR / VR technology, and apple is expected to launch Mr headset next year. With the continuous breakthrough of hardware technology and the continuous maturity of cloud computing, AI and 5g technology, AR / VR burst consumer applications are worth looking forward to.
VR: industry demand is growing rapidly, and meta is leading the industry. 1) Demand side: at present, VR equipment has been popular, Meta new product meta quest2 (the selling price is only $299) drives the explosive growth of Q2 VR equipment shipment in 2021, with the shipment reaching 2.13 million units, with an increase of 351%. According to IDC's prediction, VR equipment will increase from 5 million units in 2020 to 28 million units in 2025. According to omdia's prediction, the activation number of VR helmets will exceed that of Xbox game consoles to 70 million units in 2026. 2) supply side: according to IDC, in 2021 The competition pattern of Q2 VR equipment is meta (75%), Pico (6%), Dapeng (6%), HTC (5%), HP (3%), others (6%). 3) from the BOM of VR products, the proportion of display screen and optical parts is relatively high, which is estimated to account for 30% and 20%. We assume that the sales volume of VR will reach 40 million units in 2025, the product cost will be 1000 yuan, and the corresponding market of assembly, display screen and camera will reach 40 billion yuan, 12 billion yuan and 8 billion yuan.
Ar: growth is expected to break out in 2024. 1) Demand side: at present, the demand for AR is relatively flat. In 2021, the shipment of Q2 VR equipment was 70000 units, an increase of 0.8% at the same time. According to strategy analytics, at present, 81% of AR glasses sales are 2B end, while after the advent of consumer grade ar glasses, the 2C end market will show explosive growth, and more than 80% of sales will be for consumers by 2026. Therefore, we expect the explosive growth of AR glasses consumer market from 2024 to 2025. According to IDC's forecast, AR equipment will increase from 5 million units in 2020 to 21 million units in 2025. 2) The competition pattern of AR equipment is Microsoft (29%), mad gaze (22%), shadow creator (13%), realwear (9%), Epson (7%), and others (20%). 3) ar near eye display scheme is different from VR, which is composed of image source device and display optical device. The image source device is responsible for generating and projecting the image into the display optical device, and the display optical device is responsible for reflecting the image into the user's glasses. At present, the image source technology mainly includes LCOS, DLP, OLEDos and microled, with LCOS and DLP as the mainstream , microled has better performance but has not yet achieved mass production, which will become the development trend in the future. Display optics include prism, free-form surface, birdbath, optical waveguide, etc. at present, it shows the trend of evolution from free-form surface and birdbath to optical waveguide. The difference of display optics is the key part to distinguish ar optical links.
Investment advice
We are optimistic that the penetration rate of VR and AR equipment will continue to improve, driving the rapid expansion of the demand of the assembly, optics and display industries. It is recommended to pay active attention to Chinese listed companies that have deployed cutting-edge technologies in the VR & AR industry and entered the supply chain of global VR & AR brand manufacturers, including Goertek Inc(002241) , Luxshare Precision Industry Co.Ltd(002475) providing complete machine solutions, and Shunyu optical technology, Zhejiang Crystal-Optech Co.Ltd(002273) , Zhejiang Lante Optics Co.Ltd(688127) providing optical components.
Risk statement
The sales volume of VR equipment is less than expected, the progress of AR technology is less than expected, the industry competition is becoming more and more fierce, and there are systemic risks.
