Speeding up the expansion of the track, the Metaverse hardware leader rides the wind and waves

On April 26, 2022, VR/AR hardware leader Goertek released the financial report for the first quarter of 2022 and the financial forecast for the first half of 2022.

On the whole, driven by the continuous expansion of the acoustic complete machine and intelligent hardware business, in the first quarter, Goertek achieved a revenue of 20.112 billion yuan, a year-on-year increase of 4.337 billion yuan; the net profit attributable to the parent after deduction was 878 million yuan, a year-on-year increase. 46.06%.

At the same time, in the first half of 2022, the company’s profitability is expected to remain stable and improving. According to the performance forecast data, in the first half of the year, the company is expected to achieve a net profit attributable to the parent of 2.077-2.423 billion yuan, a year-on-year increase of 20-40%;

In 2022, under the background of the repeated impact of the epidemic affecting downstream demand and the surge of upstream raw materials, the market is full of pessimism about the prospects of the domestic consumer electronics industry, and the dazzling performance of Goertek this quarter will undoubtedly boost investment to a certain extent. ‘s confidence.

Smart hardware continued to increase volume, and performance resilience was significantly enhanced

Benefiting from the continuous growth in demand for smart hardware products such as VR, TWS headsets, smart wearable devices, and related precision components, Goertek’s revenue and net profit after deductions in Q1 2022 have both achieved significant growth, with remarkable performance resilience enhanced.

From the perspective of revenue, the company recorded revenue of 20.112 billion yuan in Q1 in 2022, a year-on-year increase of 43.37%, and the growth rate was further enhanced. During the reporting period, the precision components business recorded a revenue of 3.153 billion yuan, a slight decline of 1.42% year-on-year; the smart acoustic whole machine recorded a revenue of 6.469 billion yuan, a year-on-year increase of 6.10%; the smart hardware business revenue increased by 125.05% to 10.144 billion yuan, The proportion of revenue further increased to 50.44%, mainly due to the increase in shipments of Oculus Quest2, PS5 and other VR devices, smart game consoles and other products. The strong demand drove the company’s smart hardware business performance to continue to expand.

Speeding up the expansion of the track, the Metaverse hardware leader rides the wind and waves

From the perspective of profitability, in 2022, the net profit attributable to the parent company after the deduction of non-fee from Goertek shares in Q1 2022 will be 878 million yuan, a year-on-year increase of 46.06%, and the actual profitability will continue to improve. During the quarter, the net profit rate after deducting non-returning to the parent company increased significantly. On the one hand, thanks to the increase in shipments of VR, smart game consoles and other products, the company’s revenue scale expanded, and on the other hand, it also benefited from the company’s improved management capabilities and production technology. During the reporting period, the expense ratio continued to narrow. In addition, changes in the fair value of equity investments led to a reduction in non-recurring gains and losses, which also contributed to the net profit attributable to the parent after deduction.

On the whole, benefiting from the rapid expansion of new smart hardware represented by VR/AR, during the reporting period, Goertek’s smart hardware business grew rapidly, driving further expansion of the company’s revenue; Driven by high profit margins, the company’s overall profitability continued to improve, and its operational resilience was significantly enhanced. Looking forward to the future, it is expected that with the successive releases of new products from giants such as Meta and Apple, it is expected to stimulate the rapid development of the VR/AR industry again, and the company, as a leading hardware company in the industry, is expected to benefit in the long run.

New intelligent hardware expansion, Goertek enjoys industry dividends

Since 2018, with the increase in the penetration rate of smartphones, the global smartphone shipments have begun to decline significantly, and the industry growth has shown a slowing trend. At the same time, new models represented by VR virtual reality, TWS headsets, and smart wearable devices The rapid rise of intelligent hardware products has become a new favorite in the field of consumer electronics.

TWS headsets are developing, and VR/AR takes over the growth

In recent years, as the intelligent voice interaction function has become more mature and the product user experience has been continuously improved, smart earphone products have ushered in a period of rapid penetration, and the industry as a whole has entered the fast lane of development. According to statistics from Futuresource, in 2021, the global shipment of smart earphone products will be about 300 million units, a year-on-year increase of about 37%. Looking forward to the future, benefiting from the continuous expansion of product categories, the continuous enrichment of functions, and the continuous improvement of product experience, it is expected that the shipments of smart wireless headset products are expected to continue to grow steadily in the next few years, with an average compound annual growth rate from 2021 to 2025. The rate is expected to reach 21.8%, becoming a smart hardware product with market growth potential.

At the same time as the development of TWS headset products, the AR/VR industry has also entered a period of rapid expansion. According to IDC statistics, in 2021, the global shipments of VR and virtual reality products will be about 9.36 million units, a year-on-year increase of about 68.6%, and the global AR augmented reality product shipments will be about 330,000 units, a year-on-year increase of 13.8%, continuing rapid development. situation. Looking forward to the future, with the entry of more leading enterprises, under the virtuous circle of “hardware + content” two-way promotion, it is expected that VR/AR products are expected to maintain a rapid expansion trend in the next few years. According to the forecast data of Digitimes, 2022-2025 In 2018, the average compound annual growth rate of global VR/AR products is expected to reach 59.2%, and the growth prospects are optimistic.

β and α resonate, Goertek ushered in a new round of growth

Benefiting from the rapid development of new global intelligent hardware equipment, Goertek, as a leading hardware equipment enterprise in the domestic consumer electronics field, has always followed the Changes in the market wind direction and forward-looking layout of new intelligent hardware products are expected to usher in the continuous resonance of new intelligent hardware blooming at multiple points.

Taking VR/AR products as an example, as early as 2012, Goertek started to lay out the road of optical development by establishing a subsidiary of Goertek Optical Technology. In 2016, it began to cooperate with Qualcomm to develop a leading VR headset reference design; in 2017, it invested 10% of the shares of Kopin in the United States to cooperate in the field of microdisplay technology; in 2017, the AR curved lens achieved mass production; in 2018, it signed an agreement with WaveOptics to exclusively produce light Waveguide original; 2019 self-developed Pancake folding optical path module mass production.

After years of development, the company has achieved industry-leading technology in optical lenses, optical path design, opto-mechanical modules and other technical fields. A one-stop solution provider for mass production delivery, precision optical product measurement and testing.

Speeding up the expansion of the track, the Metaverse hardware leader rides the wind and waves

With its strong technical strength and R&D advantages, Goertek has won the recognition of the leading players in the downstream VR/AR field, and has reached long-term in-depth cooperation with global mainstream brands, including Meta, Sony and Pico, etc. Among them, the shipments of high-end headsets The market share is over 80%.

Looking forward to the future, with the gradual maturity of technology and the blessing of rich content, VR/AR application scenarios will continue to expand, and the industry has a broad space for growth. As a global leading manufacturer, Goertek is expected to maintain a high market share in the new intelligent hardware field under the strategy of first-mover advantage and key customer binding, fully enjoy the beta dividend of industry expansion, and successfully open up new growth for the company. curve.

At the same time, under the strategy of “parts + finished products”, Goertek has formed a current business structure with the business of intelligent acoustic complete machines, precision components and intelligent hardware as the main business, and has continued to produce upstream and downstream acoustic and optical components. The whole machine assembly and solutions provide business expansion and extension, the overall added value of the company’s business has been significantly improved, and the certainty of profitability has been significantly improved; at the same time, the covered products have also expanded from smartphones to TWS headsets, VR/AR headsets, wearable devices, and smart speakers. In addition to expanding the company’s performance in various fields, the diversified terminal products also provide the company’s performance with a higher risk resistance capability, which greatly improves the resilience of future performance growth.

On the whole, under the resonance of the industry beta dividend and the company’s own alpha prospects, Goertek is expected to maintain a rapid growth range of about 30-50% in the future, and the overall prospect is relatively optimistic; and from the valuation level, the company’s current market value It is about 95 billion yuan, corresponding to 22 times the level of PE (TTM), which is basically a reasonable low range, and there is still a certain room for imagination in the future.

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