Shanghai Kangnate Optical Technology Group Co., Ltd. (hereinafter referred to as "Kangnate Optical") successfully listed on December 16, 2021. The global number of shares issued was 122 million shares at HK$4.46 per share, raising approximately HK$474 million.
During the listing process in Hong Kong, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support and highlight the company's competitive advantages, assisting the company, investment banks and other intermediaries in completing relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business and other important chapters), helping the company communicate with the Hong Kong Stock Exchange and investors, assisting investors to quickly understand the market ecosystem and competitive landscape, and assisting the company in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.
Global Resin Spectacle Lens Market Overview
Resin spectacle lenses are widely used in spectacle lenses and sunglasses. According to a Frost & Sullivan report, the total retail sales value of resin spectacle lenses globally increased from $32.4 billion in 2015 to $35.8 billion in 2020, with a compound annual growth rate of 2.0%. The expected market size will increase to $46.5 billion, with a compound annual growth rate of 5.4% from 2020 to 2025.
According to a Frost & Sullivan report, from 2015 to 2020, the retail sales value of resin spectacle lenses in North America, Asia-Pacific region, Europe and other regions increased by compound annual growth rates of 1.5%, 2.2%, 2.2% and 3.3%, respectively. The main reason for the relevant increase in retail sales value is the growing demand for glasses by patients with multiple visual impairments (such as myopia, hyperopia, presbyopia, astigmatism, etc.). By 2025, the growth in the retail sales value of resin spectacle lenses in the above regions may continue, with compound annual growth rates of 4.8%, 6.1%, 5.4% and 6.1%, respectively.
According to a Frost & Sullivan report, the retail sales volume of custom lenses globally increased from 82.2 million pieces in 2015 to 94.5 million pieces in 2020, and will increase to 1.119 billion pieces in 2023 and further to 1.238 billion pieces in 2025, with a compound annual growth rate of 5.5%. With the support of the following market drivers, it is expected that the global demand and sales volume for custom lenses will continue to show an upward trend: (i) The increasing awareness of vision health and eye examinations enables customers to identify visual impairments, and the possibility of seeking more personalized parameter glasses lenses also increases; and (ii) The increasing consumer income and purchasing power in different regional markets enable consumers to afford custom lenses more, thereby further driving related demand.
Overview of China's spectacle lens manufacturing market
According to a Frost & Sullivan report, affected by the business cycle and inventory cycle of the global market, the output value of China's spectacle lenses has fluctuated slightly in the past five years. The output value of China's spectacle lenses increased from RMB 1,135.33 million in 2015 to RMB 1,224.07 million in 2020, with a compound annual growth rate of 1.5%. In the future, with the increase in the number of people suffering from refractive errors due to population aging, the increase in the number of people suffering from myopia due to excessive use of popular digital products (such as smartphones and tablets), and the increase in global consumer disposable income, it is expected that the output value of China's spectacle lenses will increase to RMB 1,406.67 million in 2025, with a compound annual growth rate of 2.8% from 2020 to 2025.
The business cycle refers to fluctuations in the macroeconomy. For downstream distributors and retailers, the inventory cycle is a stage of understanding, planning and controlling inventory levels, involving accurately ordering the required inventory according to demand and terms. It is expected that the business cycle and inventory cycle will continue to affect future output value.
Although the refractive index of glass lenses is much higher than that of resin lenses, the impact resistance of glass lenses is much lower than that of resin lenses, which is not safe for wearers. Therefore, most glass lenses have now been replaced by resin lenses. Due to the high cost-effectiveness of products and established business relationships, about 80% of the resin lenses manufactured in China are exported to overseas markets. Therefore, the total output value and production volume of China's resin lenses are highly related to international trade policies and global market demand.
The output value of China's resin lenses (estimated by multiplying the output by the average ex-factory price) has shown an overall growth trend, increasing from about RMB 1,062.18 million in 2015 to about RMB 1,163.33 million in 2020, with a compound annual growth rate of 1.8%. It is expected that the output value of China's resin lenses will increase to RMB 1,362.47 million in 2025, with a compound annual growth rate of 3.2%. In terms of total output, the manufacturing market for China's resin lenses decreased from 15.987 million pieces in 2015 to 15.087 million pieces in 2020, and is expected to increase to 15.59 million pieces in 2025. The slight decline in the total output of resin lenses from 2015 to 2020 was caused by the business cycle and inventory cycle of the global market.
Output Value and Production Volume of China's Resin Lenses, 2015-2025E
Source: Frost & Sullivan report
Competitive landscape of China's spectacle lens manufacturing market
According to a Frost & Sullivan report, the competition in China's spectacle lens manufacturing market is very fierce. It is estimated that there are about 1,450 manufacturers in China. These manufacturers compete in many aspects such as financial strength, relationships with suppliers and customers, R&D strength and employee capabilities. The growth model of the China spectacle lens manufacturing market has now shifted from a cost-driven model to a technology-driven model. Therefore, leading domestic manufacturers in China are actively investing in R&D to seize product upgrading opportunities.
According to a Frost & Sullivan report, in 2020, about 1,600 enterprises in China were engaged in the export business of resin spectacle lenses. Many international brands attach importance to the comprehensive supply chain of Chinese-made spectacle lenses and cost-effective labor, so they set up factories in China and export Chinese-made lenses to other overseas countries.
Frost & Sullivan has rich research experience in the optical products and vision health industries. It has assisted well-known enterprises to successfully list on the capital market. Successful listing cases include Chaopu Eye Hospital (2219.HK), Ophthalmic Vision Biotech (1477.HK), Desivision (1846.HK), Hengguang Optics (1134.HK), Xima Eye Hospital (3309.HK), etc.
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