Core Insights - The smart headphone industry integrates audio technology, communication technology, and artificial intelligence, enabling voice interaction capabilities [2][5] - The global shipment of smart headphones is projected to reach approximately 538 million units in 2024, with TWS (True Wireless Stereo) headphones accounting for about 332 million units [5][6] - The Chinese smart headphone market is experiencing rapid growth, with an expected shipment of around 150 million units in 2024, driven by advancements in AIoT technology and diverse application scenarios [6][2] Industry Definition and Classification - Smart headphones are defined as headphones equipped with built-in circuit sensing systems and AI neural network algorithms, enabling features such as voice wake-up, recognition, and interaction [2] - The smart headphone industry is categorized into TWS headphones, open-type headphones, over-ear headphones, and neckband headphones [2] Current Development Status - The smart headphone industry is characterized by the convergence of multiple technologies, including audio, communication, and AI, leading to enhanced voice interaction capabilities [5] - The demand for smart headphones is increasing, particularly for sports-oriented models that offer features like heart rate monitoring and voice recognition, reflecting a shift towards health and fitness [5][6] - In 2020, global smart headphone shipments reached 430 million units, marking a year-on-year growth of 19.8%, with TWS shipments at 233 million units [5] Market Trends and Future Outlook - The smart headphone market is expected to benefit from the growing trend of health consciousness and the integration of smart features, creating significant opportunities for growth [5][6] - The continuous evolution of AIoT technology and its applications is anticipated to further drive the demand for smart headphones in various consumer segments [5][6]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 29.26 RMB [7][8] Core Views - The company reported a revenue of 100.95 billion RMB for 2024, a year-on-year increase of 2.41%, and a net profit attributable to shareholders of 2.67 billion RMB, reflecting a significant year-on-year growth of 144.93% [1] - The growth in revenue is driven by improvements in the revenue scale and profitability of acoustic sensors, XR, wireless earphones, and wearable products [1] - The company anticipates that AI glasses and AR headsets will become new growth drivers in 2025, despite a projected decline in VR/PS5 industry shipments [1][3] Summary by Sections Financial Performance - In Q4 2024, the company achieved a revenue of 31.31 billion RMB, representing a year-on-year increase of 27% and a quarter-on-quarter increase of 7% [1] - The gross profit margin for 2024 was reported at 11.1%, an increase of 2.1 percentage points year-on-year [1] - The company recorded an asset impairment loss of 4.12 billion RMB in Q4 2024, primarily due to aging inventory and the impairment of old production line equipment [1] Product Line Performance - In the second half of 2024, the precision components segment generated revenue of 8.74 billion RMB, a year-on-year decrease of 11.2% but a quarter-on-quarter increase of 38.6% [2] - The smart acoustic products segment reported revenue of 13.51 billion RMB, down 9.5% year-on-year but up 5.6% quarter-on-quarter, indicating a recovery in market share [2] - The smart hardware segment saw a revenue increase of 27.1% year-on-year, reaching 37.35 billion RMB, with a gross margin of 9.1% [2] 2025 Outlook - For 2025, the company expects a 6% year-on-year increase in smart acoustic product revenue, with a gross margin improvement to 9.9% [3] - The overall revenue is projected to decline by 4% to 96.87 billion RMB, while net profit is expected to grow by 23% to 3.29 billion RMB [3][4] - The company is adjusting its expectations for VR global shipments, forecasting a 12% decline to 6.5 million units, which may impact smart hardware revenue [3][4] Valuation and Estimates - The estimated net profits for 2025, 2026, and 2027 are 3.29 billion RMB, 3.81 billion RMB, and 4.28 billion RMB respectively, with downward adjustments of 18% and 13% for 2025 and 2026 [4] - The company is assigned a PE ratio of 31.13x for 2025, reflecting its potential in AI glasses and AR products, with a target price maintained at 29.26 RMB [4]