Geer shares against the trend of breakout

• News
• 2024-06-27

Against the backdrop of a global recovery in demand for consumer electronics, and with a forward-looking layout of the "AI+" strategy, the leading acoustic and optical electronics company Goertek Co., Ltd. (hereinafter referred to as "Goertek" 002241.SZ) has achieved a "doubling" growth in performance in the first three quarters of 2024.

On October 23, Goertek disclosed its financial report for the third quarter of 2024. The data shows that in the first three quarters of 2024, Goertek achieved a net profit attributable to shareholders of listed companies of 2.345 billion yuan, a year-on-year surge of 162.88%. The company achieved a revenue of 29.264 billion yuan, a year-on-year increase of 1.70%, and a total revenue of 69.646 billion yuan for the first three quarters of 2024; in the third quarter of this year, Goertek achieved a net profit attributable to the mother company of 1.12 billion yuan, a significant year-on-year increase of 138.16%.

The growth in performance is inseparable from this leading company's precise understanding of the market dynamics of smart hardware products. Through the product strategy of "precision components + smart hardware complete machines," Goertek continues to promote technological innovation and market expansion in core fields such as acoustics, optics, and microelectronics.

It is worth mentioning that in 2024, Goertek's layout in the sub-markets of VR (Virtual Reality), AR (Augmented Reality), and smart wearable devices is particularly prominent. Especially under the dual promotion of the recovery of consumer electronics demand and the rapid development of AI technology applications in 2024, the company's core competitiveness in the field of intelligent manufacturing has been further enhanced, and the relevant business segments have performed well.

Advertisement

In addition to the steady growth of its main business, Goertek's continuous breakthroughs in the field of optical display have also attracted investor attention.

In the third quarter, Goertek Optics not only launched several high-performance optical products at the "2024 VR&AR Display Optics Technology Summit" but also showcased its latest AR optical engine modules, automotive vision products, etc., at the China Optics Expo. Goertek has formed a multi-dimensional technical advantage in product technology through the collaborative layout of several core technical links such as optics, acoustics, and sensors, providing strong support for its leading position in the smart hardware market.

While actively expanding its AI+ electronic consumer hardware business, the company also continues to increase investment in emerging markets. For example, its early layout in the fields of the metaverse and smart audio glasses has further consolidated its first-mover advantage in this race.

Technological innovation drives the rise of smart hardware business.

For the current consumer electronics industry, the "AI" content is one of the most important indicators that the market is focusing on.Since the third quarter of this year, multiple global consumer electronics terminal brands have successively launched AI hardware products, including AI PCs, AI smartphones, AI glasses, and various other intelligent terminals. Coupled with the arrival of the replacement cycle, the consumer electronics terminal market is gradually warming up, and it is expected that sales will return to a growth trajectory.

According to IDC forecasts, global smartphone shipments will continue to grow from 2024 to 2028, with an average annual growth rate stable between 1.7% and 4%. This implies that the smart hardware market is about to witness a new round of demand growth. Goertek, with its technological reserves in acoustics, optics, and microelectronics, has seized the opportunity of this market recovery and is experiencing rapid business growth.

Through its "precision components + intelligent hardware complete machines" product strategy, Goertek has not only made significant strides in emerging intelligent hardware fields such as VR and AR but also quickly seized the initiative in the recovery of the consumer electronics market. The company, with its years of accumulation in acoustics, optics, and sensor technologies, has accurately grasped the upgrade demands of consumer electronics terminals.

Taking VR (Virtual Reality) and AR (Augmented Reality) as examples, the company launched several high-performance VR Pancake display modules, optical display products, and micro-nano optical elements in the third quarter of 2024. These not only provide users with an immersive experience but also further strengthen Goertek's leading position in the global XR (Extended Reality) market.

Data from the renowned research institution Counterpoint Research shows that since the second quarter of 2024, Meta has held about 80% of the VR market share. As a core enterprise in Meta's supply chain, Goertek has significantly benefited. Especially with the launch of the Quest 3S affordable version, the attention and sales volume of VR devices have been further driven, making Goertek's continuous growth in the VR product line even more solid.

Intelligent wearable devices are also a highlight of Goertek's business growth. Relying on its technological accumulation in acoustics and MEMS sensors, the company's smart wireless earphones, smart glasses, and other products continue to lead the market in audio quality and intelligent interaction experiences. According to the latest data from IDC, the global shipment of wearable devices is expected to reach 537.9 million units in 2024, a year-on-year increase of 6.1%. Among them, the growth rate of emerging wearable devices such as smart rings is particularly eye-catching, and Goertek is quickly responding to market demands with its technological accumulation in this field.

In addition to the steady development in traditional fields such as optoelectronics, the company's innovation in optical display technology is also highly regarded by the market. In the third quarter of 2024, Goertek launched several high-precision optical display devices at the China Optics Expo, including AR optical engine modules and automotive vision products. The application of the company's optical products in automotive and XR markets has further promoted the diversification and market expansion of its business, consolidating its competitiveness in the global consumer electronics and intelligent hardware markets.

From VR/AR to intelligent wearable devices, by deeply cultivating core technology fields and expanding into emerging markets, Goertek has provided strong momentum for the continuous growth of its own performance.

The latest forecast from the research institution Canalys indicates that by 2024, the penetration rate of AI PCs in the Greater China region will reach 13%, and it will rise to 37% by 2025. This data shows that the application of AI hardware is in a stage of rapid growth globally. As an important participant in this market, Goertek, relying on the forward-looking layout of the "AI+" strategy, will continue to maintain a leading position in this round of hardware upgrades.The "AI+" Strategy Brings a New Round of Growth Opportunities

With the rapid development of global AI technology, the smart hardware market has ushered in a new round of growth windows. In the consumer electronics industry, the empowerment of AI not only promotes the performance improvement of traditional hardware products but also accelerates the iterative innovation of emerging intelligent devices.

For Goertek, the forward-looking layout of the AI strategy has gradually shown strong market driving force. By seizing the development opportunities of "AI+" electronic consumer hardware, the company has achieved continuous growth in its core business areas and further opened up incremental space for the next few years.

As early as the beginning of 2024, Goertek identified the core role that AI technology would play in the consumer electronics market. The company relies on its technological advantages in the fields of MEMS sensors and acoustic devices to provide components for AI hardware products and promote the comprehensive upgrade of AI hardware.

Thanks to this, several smart hardware product lines of the company have achieved breakthrough progress. Especially in emerging fields such as AI earphones and AI glasses, Goertek has seized the market initiative by empowering acoustic experiences and enhancing intelligent interaction functions through AI.

According to IDC data, global AI smartphone shipments are expected to grow by 344% by the end of 2024, accounting for 19% of the smartphone market.

This huge market demand has also brought unprecedented opportunities for Goertek's precision component business. As a leading global supplier of MEMS sensors, Goertek's sensor products have covered multiple AI hardware application scenarios such as smart earphones, mobile phones, and wearable devices. Relying on a one-stop product solution of "chip + component + module + system," the company has further strengthened its supply chain position in the global AI hardware market.

Moreover, the implementation of AI technology in smart wearable devices has also brought a huge market increment. Goertek's smart earphone products, relying on the application of AI technology, have not only improved the audio experience but also enhanced the product's intelligent interaction performance.

With the continuous improvement of AI model capabilities, AI earphones will become an important entry point for interaction between people and AI large models, and Goertek, as a leading enterprise in this field, obviously has more imagination space in the new round of hardware upgrades.

In addition to earphones, the AI glasses market is also developing rapidly. Several major companies, including Meta and Huawei, are accelerating their layout in this field. Meta's Ray-Ban smart glasses have attracted much attention. These AI-equipped smart glasses not only support photography and audio playback but also achieve intelligent interaction with users through sensor technology.According to Vizun's forecast, by 2025, the market for display-less AI smart glasses is expected to experience significant growth. As a key player in the smart glasses industry chain, Goertek's technological strength undoubtedly lays a solid foundation for its future market competition.

It is worth mentioning that Goertek's holding subsidiary, Goertek Microelectronics, has also entered a new phase in the AI+ hardware field.

With the advancement of the spin-off listing plan, Goertek Microelectronics has targeted the core segment of AI smart hardware—MEMS sensor interaction technology, covering key aspects such as chip design, product development, and packaging testing, providing customized AI hardware solutions for global tech giants. After the spin-off, Goertek Microelectronics will not only be able to better focus on the research and commercialization of AI hardware but also seize the industry opportunities of AI smart hardware in the coming years by leveraging its vertically integrated industry chain advantages.

As AI technology continues to iterate and upgrade, Goertek's layout in the AI+ consumer electronics field will also usher in broader growth space. According to Canalys' forecast, by 2024, the penetration rate of AI PCs in Greater China will reach 13%, and by 2027, this figure will rise to 62%. This strong market expectation will provide a broader development platform for Goertek and will also promote the company's continued efforts in the AI hardware market.

As the "AI+" era arrives, Goertek has not only achieved a comprehensive upgrade of its consumer electronics business through AI empowerment but has also seized strategic growth points in the market through early layout. In the future, as AI technology further penetrates, Goertek's position in the global AI hardware market may become more solid, and its operating performance is expected to continue to rise.