GoerTek(SZ:002241)2025-10-31 00:59GoerTek (002241.SZ) 3Q25 Earnings Call Summary Company Overview - GoerTek is a manufacturer of acoustic components and accessory products for consumer electronics, including tablets, PCs, and smartphones. The company has established long-term partnerships with leading consumer-electronic brands due to its expertise in miniature acoustics components and execution strength [26][27]. Key Financial Highlights - 3Q25 Revenue: Rmb30.6 billion, up 4% YoY and 44% QoQ, exceeding CitiE and BBGe estimates by 17% and 11% respectively [2][3]. - Gross Margin (GM): Improved by 1.5 percentage points YoY to 12.8%, slightly below CitiE but above BBGe [2][3]. - Operating Profit (OP): Rmb1.4 billion, a 10% increase YoY, in line with CitiE and beating BBGe by 12% [2][3]. - Net Profit (NP): Rmb1.2 billion, up 5% YoY, exceeding CitiE by 6% but missing BBGe by 5% [2][3]. - Gross Profit (GP): Increased by 18% YoY to Rmb3.9 billion, beating both CitiE and BBGe estimates [2][3]. Earnings Forecast and Target Price - Revised EPS Estimates: 2025-2027 EPS estimates increased by 1%, 6%, and 6% respectively, reflecting positive contributions from smart hardware and AI glasses [3][17]. - New Target Price: Increased to Rmb38.0 from Rmb34.0, based on a 28.2x P/E for 2026, indicating confidence in the emerging XR business [3][28]. Strategic Insights - GoerTek is expected to benefit from the iPhone MEMS microphone upgrade and the anticipated growth in AI smart glasses, particularly in the US and China [3][27]. - The smart hardware segment is projected to rebound in 2026/27, driven by AI smart glasses and VR/MR recovery [13][14]. Market Position and Risks - Market Cap: Rmb116.2 billion (approximately US$16.3 billion) [4]. - Investment Rating: Rated as "Buy" with an expected total return of 15.4%, including a 14.2% price return and a 1.3% dividend yield [4][27]. - Risks: Potential risks include lower-than-expected VR/AR penetration rates and increased competition leading to price pressures [29]. Conclusion - GoerTek's 3Q25 results indicate a stable performance with positive growth prospects driven by advancements in smart hardware and strategic partnerships. The upward revision of EPS estimates and target price reflects confidence in the company's future growth trajectory, particularly in the XR and AI segments [3][28].