GoerTek(SZ:002241)2025-08-31 16:21Summary of Goertek - A Conference Call Company Overview - Company: Goertek Inc. - Ticker: 002241.SZ - Industry: Technology, specifically VR headset assembly Key Financial Metrics - Current Price: Rmb30.96 (as of August 25, 2025) - Price Target: Rmb26.50 (for June 2026) - Market Cap: Approximately $15.08 billion - Shares Outstanding: 3,491 million - 52-week Range: Rmb17.11 - Rmb32.00 Earnings Performance - 2Q25 Recurring NP: Rmb741 million, up 154% quarter-over-quarter (qoq) and 30% above expectations - Sales Growth: 30% qoq driven by early order pull-in for Apple products and Meta VR headsets - Gross Profit Margin (GPM): Increased by 1.9 percentage points qoq to 13.4% - Capex Growth: 45% yoy in 1H25, indicating investment in new projects Future Outlook - Revenue Forecast: Expected to decline year-over-year (yoy) in 2H25 but projected to grow by 28% yoy in 2026 - Earnings Growth: Anticipated 20% yoy earnings growth in 2026, despite potential margin dilution from new low-margin projects - New Projects: Engagement in AI glass, AirPods, and a potential new game console expected to drive revenue growth Investment Thesis - Neutral Rating: Despite positive growth projections, the current valuation is considered fair after a significant share price rally of over 60% since April 2025 - Earnings CAGR: Projected at 20% from 2024 to 2027, but this upside is believed to be already reflected in the current share price Risks - Upside Risks: Better-than-expected demand for VR products and successful new business developments - Downside Risks: Potential market share losses, lower average selling prices (ASP) for Apple projects, and demand uncertainty for VR/AR products Financial Estimates - Revenue Estimates: - FY25E: Rmb94,143 million - FY26E: Rmb120,559 million - FY27E: Rmb137,380 million - Adjusted EPS: - FY25E: Rmb0.93 - FY26E: Rmb1.12 - FY27E: Rmb1.33 Valuation Metrics - P/E Ratio: 22x one-year forward P/E, in line with peer average - Dividend Yield: Expected to be 0.6% in FY25E, increasing to 0.9% by FY27E Style Exposure - Value Rank: 52% - Growth Rank: 54% - Momentum Rank: 76% - Quality Rank: 60% - Low Volatility Rank: 64% - ESG Quality Rank: 18% Conclusion - Overall Assessment: Goertek is positioned for growth in the VR headset market with new projects on the horizon, but current valuations suggest a neutral stance on investment. The company faces both opportunities and risks that could impact future performance.