The recent stock activity surrounding DrOptical Technology Co., Ltd. (stock code: 300622.SZ) has captured significant attention, especially after high-profile shareholders, including the actual controllers, Alexander Liu and Louisa Fan, announced plans to reduce their stakesThis announcement came shortly after other executives within the company had also engaged in share sell-offs.

On the evening of February 17, DrOptical disclosed their intention to reduce holdings by up to 2.69% of the company's total shares through concentrated bidding or bulk transactionsBased on the February 18 stock price of 43.41 RMB per share, this equates to a market value of approximately 205 million RMB—a significant sumStrategically, this move seems aimed at capitalizing on the elevated market position of the company’s shares, influenced by prevailing market trends.

Prior to this announcement, a series of sell-offs were conducted by key executives of the companyIn November 2024, several influential figures within the organization, such as Liu Kaiyue, Liu Zhiming, and others, revealed their own plans to divest, collectively cashing out around 119 million RMBSuch a string of reductions can often signal to the market that insiders believe the stock has peaked, which can have repercussions on investor confidence.

The timing of these reductions is particularly noteworthy, coinciding with a peak in share prices catalyzed by the burgeoning interest in AI eyewearSince late July 2024, fueled by the hype around “AI +” products, DrOptical’s stock skyrocketed by over 450% within five months, adding more than 8 billion RMB to its market capitalizationAlthough a correction occurred after reaching highs in December 2024, the stock still trades favorably compared to earlier levels.

On February 18, the stock started the day on a bearish note, closing at 43.41 RMB per share—a drop of 10.37%, marking a new low since the start of 2025, with an approximate total market capitalization of 76 billion RMB

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This decline raises questions about the sustainability of the price hikes, especially with insider divestitures possibly indicating a longer-term trend correction.

As the AI eyewear sector began to mature, DrOptical positioned itself as an early entrantIn March 2023, the company participated in financing rounds for Thunderbird Innovations, indicating a proactive approach towards entering this emerging technology spaceAlmost immediately after, further collaboration efforts were announced for the establishment of a joint venture to explore this burgeoning market.

Despite being among the players in the AI glasses market, DrOptical does not appear to be heavily invested in R&D activities related to this technologyNotably, historical data from 2020 to 2022 reveals that they had expended zero amounts on research and developmentAn uptick in R&D spending came only after acquiring digital platform companies in 2023, yet the proportion of revenue allocated remains minuscule relative to total operational income.

Even amid high stock prices driven by the AI glasses narrative, the reality is that DrOptical’s expenditures on innovation remain lowIn 2023 and the first three quarters of 2024, R&D expenses amounted to approximately 466,940 and 247,080 RMB, respectively, accounting for a mere 0.40% and 0.27% of total revenuesThis raises concerns about the long-term strategic direction of the company in relation to technological advancements.

Nevertheless, the rising stock price goals were achieved; on July 18, 2024, the stock languished at 11.19 RMB per share, but by December 27, it rocketed to 61.71 RMB, marking an astonishing surge of 451.47%. As stock prices peaked, numerous shareholders began to liquidate their holdings rapidly, a pattern commonly seen when stocks surge unexpectedlyThe market, therefore, is now watching closely as the share prices see corrections following this frenzy.

Performance data is mixed, with DrOptical experiencing financial turbulence since its introduction to the market

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Formed in 1993 by Alex Liu and Louisa Fan in Shenzhen, the company became the first eye-care retail stock to list on the Shenzhen Stock Exchange in 2017. Sales have shown a steady increase, growing from 471 million RMB in 2017 to approximately 1.18 billion RMB in 2023. However, since 2022, the company has faced recurring issues with growth in revenue not translating into proportional profit increases.

In the past three years, DrOptical reported revenues of 887 million RMB, 962 million RMB, and 1.18 billion RMB while the respective net profits were 95 million RMB, 75 million RMB, and 128 million RMBThe disparity between revenue and profit undulates sharply, with a 14.46% decline in net profitability reported for the first nine months of 2024, juxtaposed against a modest revenue climb of 1.09% in the same timeframeClearly, operational costs and increased sales percentages have exerted pressure on profitability metrics.

Focus on channels reveals a vast network of physical store locations, which have reached a total of 530 by mid-2024, with 501 being directly operated and 29 franchisedDuring 2022, DrOptical expanded aggressively but was subsequently met with challenges in profitability, leading them to pivot their strategiesIn 2023, the company moderated new openings; net growth dwindled to merely two new locations while ramping up online engagement across popular platforms.

Transitioning towards online sales has yielded some success—with a GMV of 208 million RMB from online channels in 2023, reflecting a 44.5% increase from the previous yearHowever, the first half of 2024 has not shown similar fortunes, with declines in performance noted across some e-commerce platforms, including a 32.31% drop in GMV through their Douyin live streams.

This fluctuation in online sales success has led DrOptical to recommit significant resources to bolster their offline presenceOn February 7, 2025, an announcement revealed plans to raise 375 million RMB through bond issuance, with an allocation aimed at enhancing their smart eyewear retail capabilities, upgrading headquarters, and improving digital platforms—following a holistic approach to channel stability in response to uncertain online dynamics.

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