Core Viewpoint - Goer Group has terminated its planned acquisition of Mia Precision Technology and Changhong Industrial, which was valued at 10.4 billion HKD (approximately 9.5 billion RMB), after three months of negotiations due to disagreements on key terms, prompting a reevaluation of its strategic transformation path [1][2]. Group 1: Acquisition Termination - The acquisition was intended to enhance Goer Group's capabilities in precision metal components, with the target companies projected to generate a combined revenue of 9.11 billion HKD (approximately 8.3 billion RMB) in 2024, accounting for about 8% of Goer Group's total revenue for the same period [2]. - Financial pressures were a significant factor in the termination, as Goer Group had 20.179 billion RMB in cash but 16.133 billion RMB in interest-bearing debt, which would have increased its debt ratio (already at 59.69%) and liquidity risk if the acquisition proceeded [2]. - Potential risks associated with the target companies were also a concern, including legal issues faced by Mia Precision and the low market competitiveness of Changhong Industrial due to its low technical barriers [2]. Group 2: Strategic Shift - Despite the acquisition's failure, Goer Group is pursuing internal growth strategies, including a 1.903 billion RMB investment to acquire 100% of Shanghai Aolai, enhancing its competitiveness in wafer-level micro-nano optical devices for AI smart glasses and AR applications [3]. - Goer Microelectronics has submitted a listing application to the Hong Kong Stock Exchange to independently finance the development of MEMS sensors, reducing reliance on group funds [3]. - Financially, Goer Group reported a revenue of 37.549 billion RMB and a net profit of 1.417 billion RMB in the first half of 2025, marking a year-on-year growth of 15.65%, with the precision components segment being the fastest-growing at 15.051 billion RMB and a gross margin of 21.51% [3]. Group 3: Conclusion - The termination of the acquisition reflects Goer Group's strategic prudence in global competition, emphasizing careful capital allocation and forward-looking technological investments as it transitions from a "manufacturing giant" to a "technology platform" [4].

Industry Overview - The consumer electronics sector is experiencing a collective rise, with stocks such as Luxshare Precision, Lianyi Intelligent Manufacturing, and GoerTek increasing by over 5% amid favorable policies [1] - Multiple policy supports have been provided to the consumer electronics industry this year, including tariff exemptions and a domestic consumption subsidy of 300 billion yuan, which are stimulating domestic demand [3] Company Performance - GoerTek reported impressive financial results for Q1, with a revenue of 16.305 billion yuan and a net profit of 469 million yuan, marking a year-on-year growth of 23.53% [3] - The company's gross margin and net margin improved to 12.41% and 2.68%, respectively, indicating a significant recovery in profitability [3] - GoerTek's net profit increased by 46.59% quarter-on-quarter, and its debt ratio decreased to 56.05%, enhancing its solvency [3] Research and Development - GoerTek maintained high R&D investment, with Q1 R&D expenses reaching 1.096 billion yuan, a year-on-year increase of 32.83%, accounting for 61.74% of total expenses [4] - The company showcased innovative products at CES 2025, including lightweight AI+AR glasses and AI smart interaction rings, reinforcing its technological edge [4] Market Trends - The rise of AI technology is driving a new competition in the consumer electronics market, particularly in the development of AI headphones, which are evolving from auxiliary devices to smart terminals [4][5] - GoerTek is positioned to benefit from the recovery of the consumer electronics market and the deep integration of AI technology with terminal products, particularly in AR/VR/MR and smart wearables [5]