The company is a leading global provider of acousto-optic products and solutions. Over the past 20 years, Goertek has been deeply involved in acoustic technology, gradually developed optoelectronic modules and products, and formed a “parts+finished product” product layout. The company's main products include complete equipment such as AR/VR headsets, TWS headsets, smart wearables, etc., as well as precision components such as acoustics, MEMS sensors, and optoelectronic modules. It is the world's leading one-stop supplier of sound and optoelectronic products. In 2023, the company achieved revenue of 98.574 billion yuan, down 6.03% year on year; net profit to mother was 1.088 billion yuan, down 37.80% year on year. 2024Q1 achieved revenue of 19.312 billion yuan, down 19.94% year on year; net profit to mother was 0.38 billion yuan, up 257.47% year on year; the company's gross margin was 9.2%, up 2.22pct year on year; net margin was 1.89%, up 1.44 pct year on year, and profitability improved significantly.
There is sufficient momentum for performance restoration, XR shipments can be expected, and the product structure continues to be optimized. (1) TWS headphone orders from major customers are picking up, and the operating income and gross margin of the intelligent acoustics business are expected to continue to rise; (2) the smart hardware sector product structure continues to be optimized, and the revenue share of the XR/wearable segment with high gross margin is expected to increase, driving a recovery in comprehensive gross margin; (3) the precision component sector, AI terminal volume drives up ASP components such as MEMS, and the increase in the share of high-end components is expected to further enhance the company's profitability; (4) The company actively adjusts production capacity layout and superimposes Meta Quest 3 and Meta AR With the release of new products such as products, the XR sector is expected to become a new driving force for the company's continued growth in the future.
Adjust equity incentive assessment targets to show management confidence. On June 27, the company adjusted the equity incentive assessment target. The assessment index was adjusted from 2024-2026 revenue no less than 106.4/129.8/154.9 billion yuan to 2024-2026 revenue no less than 106.4/129.8/154.9 billion yuan, or 2024-2026 net profit increased by no less than 100%/140%/180% compared to 2023, respectively. The corresponding net profit to mother was not less than 2.18/2.61/3.05, respectively billion yuan. The adjustment of assessment indicators shows the company's confidence in recovering performance and profitability, effectively stimulates the enthusiasm of the company's employees, and effectively enhances the company's ability to operate continuously.
Profit forecast, valuation and rating: In view of factors such as the recovery of the company's major customer headphone business, growth driven by new XR product releases, and component ASP improvement, we raised the 24-26 net profit forecast of 2.529/3.501/4.369 billion yuan (adjustment ratio is +22.35%/+34.97%/+38.08%), corresponding to the 24-26 PE to 26X/19X/15X, respectively. As a leading domestic consumer electronics company, Goertek's XR penetration rate will gradually increase in the future. The company's XR foundry market share will be high, compounding the steady growth of the company's smart wearable device business and the recovery of the headphone business. We are optimistic about the company's future revenue and performance growth trends, and maintain a “buy” rating.
Risk warning: AR/VR market development falls short of expectations; consumer electronics demand recovery falls short of expectations; gross margin recovery falls short of expectations.