GoerTek(SZ:002241)2025-09-16 02:03Summary of Goertek (A) Research Report Company Overview - Company: Goertek - Sector: Technology - Description: Goertek is a leading acoustics supplier in China, providing speaker-box and MEMS microphones, with a diverse customer base including Apple, Samsung, and Huawei. The company has been involved in AirPods assembly since 2018 and VR system ODM assembly since 2016, being the sole supplier for Facebook Oculus and Sony PS VR [12][13]. Key Points Upgrade and Price Objective - Rating Change: Upgraded to Buy from Underperform - Price Objective: Increased to CNY42 from CNY17, reflecting a target multiple of 34x 2026E P/E, which aligns with historical averages and previous XR demand upticks [1][16]. Earnings Forecast - Earnings Growth: Expected structural earnings recovery starting in 2026, driven by smart glasses adoption, AirPods market share recovery, and acoustic ASP expansion. Earnings estimates for 2025-2027 have been raised by 4-51% [1][15][22]. - Net Income Projections: - 2025E: CNY3,084 million - 2026E: CNY4,300 million - 2027E: CNY5,574 million [4][10]. Smart Glasses Market Potential - Market Growth: Anticipated shipments of smart glasses to rise from 2 million in 2024 to 10 million and 18 million in 2025 and 2026, respectively, with a forecast of 55 million units by 2030 [2][27][30]. - Total Addressable Market (TAM): Expected to exceed USD14 billion by 2030, up from less than USD1 billion in 2024 [32]. Competitive Position - Assembly Dominance: Goertek is positioned as a key beneficiary in the smart glasses market due to its assembly capabilities for major brands like Meta, Xiaomi, Amazon, and Huawei [2][27]. - Core Competencies: The company’s expertise in core components such as waveguides and micro-displays is expected to facilitate its transition from a pure EMS to a comprehensive supplier, enhancing margins and earnings [29]. Legacy Business Recovery - AirPods Market Share: After losing assembly share in 2022-2023, Goertek has rebuilt its relationship with Apple, with expectations to recover market share to 35% by 2H26 following new model launches [3][35]. - Acoustic Business: The high-margin acoustic segment is undergoing a specification upgrade cycle, supporting ASP expansion [3][40]. Financial Metrics - Revenue Estimates: - 2025E: CNY96,530 million - 2026E: CNY119,697 million - 2027E: CNY137,326 million [10][22]. - EPS Growth: Expected EPS growth from CNY0.88 in 2025 to CNY1.60 in 2027, with significant year-on-year increases [4][22]. Risks and Opportunities - Downside Risks: Include slower-than-expected margin recovery, further AirPods market share loss, and adverse macroeconomic conditions [47]. - Upside Risks: Faster margin improvement and market share expansion in AirPods and AR/VR business [47]. Conclusion - Goertek is positioned for significant growth driven by the smart glasses market and recovery in legacy businesses. The upgrade to a Buy rating reflects confidence in the company's ability to capitalize on emerging opportunities and improve financial performance in the coming years [1][13][15].