The performance of Goertek shares has climbed higher, and the advantages of VR first release bureau have gradually been realized

The annual report performance of Goertek (002241.SZ), the leader of electronic devices, was released, increasing revenue and increasing profits, and the total asset scale climbed to a new high.

According to the annual report disclosed by Goertek on the evening of March 29, the company achieved operating income of 78.221 billion yuan in 2021, an increase of 25.47% year-on-year; net profit attributable to shareholders of listed companies was 4.275 billion yuan, an increase of 50.09% year-on-year. Basic earnings per share were RMB1.29, an increase of 44.94% year-on-year.

For the significant growth of revenue and net profit, the company said that it benefited from the continuous growth of demand for smart hardware products such as VR virtual reality, TWS smart wireless headsets, smart wearables, smart home electronic game consoles and accessories and related precision components.

With high growth, intelligent hardware and precision components are the driving engines. On the basis of the rapid growth of revenue in 2020, in 2021, the intelligent hardware business segment achieved revenue of 32.809 billion yuan, an increase of more than 80% year-on-year, accounting for more than 40% of the total revenue, becoming the product line that contributed the most to revenue in 2021.

At the same time, the total assets of Goertek shares have further expanded. As of the end of 2021, the company's total assets exceeded the mark of 60 billion yuan, reaching 61.079 billion yuan, an increase of 24.35% year-on-year.

The smartphone dividend fades and the VR era arrives, and Goertek, which is located in the middle of the industrial chain and has a forward-looking layout of VR/AR, has occupied a first-mover advantage in VR machine assembly, key components and other fields. The accelerated development of the VR market will bring key momentum to the company's future profit growth.

The quarterly and annual reports of Goertek since last year are releasing important signals to the market - VR-related businesses are rapidly exploding.

The smart hardware business continued its upward trend, and its revenue increased by 80%.

On March 30, the day after the release of the annual report, Goertek opened high in the morning, rising more than 5% intraday. As of noon on the same day, Goertek shares rose 5.16%, the highest gain in the consumer electronics sector, with a transaction amount of 2.478 billion yuan.

Goertek suffered a performance inflection point in 2018 and successfully reversed it in 2019. After several years of consolidation and vigorous development, the company's performance will reach a new high in 2021.

Overall, in the past three years, Goertek's revenue and net profit have increased year by year, entering a high-growth channel.

According to the annual report, from 2019 to 2021, the company's operating income was 35.148 billion yuan, 57.743 billion yuan and 78.221 billion yuan, respectively, and the net profit attributable to the shareholders of the listed company was 1.281 billion yuan, 2.848 billion yuan and 4.275 billion yuan.

At the same time, the company's cash flow is good. According to the annual report data, in 2021, the net cash flow generated by the operating activities of Goertek co., Ltd. was 8.598 billion yuan, an increase of 11.93% year-on-year. This was due to the expansion of the Company's operating scale during the reporting period, the improvement of its operating cycle and the increase in net cash flow from operating activities.

Focusing on the main business, Goertek's main business includes precision components business, intelligent acoustic machine business and intelligent hardware business, and the main business belongs to the computer, communication and other electronic equipment manufacturing industry. The company's main products include precision components such as acoustics, optics, microelectronics, structural parts, and smart hardware products such as TWS smart wireless headsets, VR virtual reality/AR augmented reality, smart wearables, smart home electronic game consoles and accessories, and smart homes.

From the performance of 2021, in terms of the main business, electronic components are still the first major source of income for Goertek, achieving revenue of 76.946 billion yuan last year, an increase of 36.11% year-on-year, accounting for 98.37% of the total revenue.

In terms of regions, of the total revenue of 78.2 billion, more than 90% came from overseas, reaching 70.65 billion yuan, an increase of 39.23% year-on-year. Domestic business revenue was RMB7.515 billion.

In terms of products, the business revenue of Goertek is mainly composed of three parts: intelligent acoustic machine, intelligent hardware and precision components, and the revenue of the three in 2021 will account for 38.73%, 41.94% and 17.69% respectively. Compared with 2020, the proportion of intelligent acoustic machines and precision components has declined. The proportion of smart hardware has increased significantly, from 30.57% to 41.94%, becoming the product line that will contribute the most to revenue in 2021.

The data shows that intelligent hardware achieved revenue of 32.809 billion yuan last year, an increase of 85.87% year-on-year, accounting for more than 40% of the total revenue; intelligent acoustics followed by 30.297 billion yuan of revenue last year, accounting for 38.73%; precision components 13.84 billion, accounting for 17.69%.

But overall, the sustainability of revenue in the smart hardware business segment is emerging. Looking back, in 2020, smart hardware has become the fastest growing business segment of Goertek's revenue. In 2020, the sector achieved revenue of 17.652 billion yuan, an increase of 107.34% year-on-year.

Vr dividend release, first release bureau to welcome the harvest

In recent years, the global smartphone market has shown a slowdown in growth, and the emerging smart hardware product market represented by VR virtual reality and TWS smart wireless headsets has risen rapidly.

According to the statistics of IDC, a well-known consulting organization, in 2021, the global shipment of VR virtual reality products was about 9.36 million units, an increase of about 68.6% year-on-year, and the global shipment of AR augmented reality products was about 330,000 units, an increase of about 13.8% year-on-year. The global VR virtual reality industry continues its rapid development trend in 2021.

The rapid development of the above-mentioned emerging intelligent hardware products has also driven the demand growth of precision components and components related to precision optics and modules, precision acoustic components, MEMS sensors and microsystem modules, haptic devices, precision structural parts and other precision components, opening up a new direction of development and market space.

The above areas are the key areas of Goertek's forward-looking layout.

There are many entrants, and Goertek has seized the first-mover advantage. According to the data, since 2012, Goertek has begun to lay out the emerging intelligent hardware business represented by VR/AR, and has become the exclusive agent of Sony PSVR since 2016.

Goertek said that thanks to the company's active layout of smart hardware business areas other than smart phones in recent years, the growth of the above emerging smart hardware product market has promoted the healthy growth of the company's precision components business, intelligent acoustic machine business and intelligent hardware business related to it.

From the perspective of fundraising investment, in recent years, Goertek has raised funds to build AR/VR and related optical module projects - AR/VR projects and AR/VR and related optical module projects - optical module projects, and the smooth implementation of related fundraising projects will enhance the company's competitiveness in the VR/AR field.

Goertek is also continuing to increase investment in research and development, building a variety of technical and process barriers.

According to the annual report, the company's R&D investment in 2021 was 4.301 billion yuan, an increase of more than 20% year-on-year. The number of R&D personnel was 12,895, an increase of 5.90% year-on-year.

R&D investment projects, "MEMS sensor and microsystem module research and development project", "VR/AR precision optics and module research and development project", "TWS smart wireless headset research and development project", intelligent wireless lightweight AR glasses research and development project" are listed.

In terms of future development strategy, Goertek said in the 2021 annual report that it actively grasps the new opportunities for industrial development in the post-mobile era and deepens the implementation of the company's "precision components + intelligent hardware machine" strategy. Promote the further development of precision components such as acoustics, optics, microelectronics, and structural parts, and smart hardware complete machine businesses such as virtual/augmented reality, smart wireless headsets, smart wearables, and smart homes.

In the next quarter of the business plan, one of the key points is to strengthen business expansion and create new business growth points.

Goertek said that on the basis of consolidating the company's existing competitive advantages in the field of precision components and intelligent hardware products, it will further expand new business directions and business opportunities, actively grasp new product opportunities in the fields of microsystem modules, MEMS sensors, precision optics and modules, haptic devices, precision structural parts, VR virtual reality, smart home entertainment products, etc., expand key projects to obtain core customers, and actively pay attention to and follow up on new product opportunities in automotive electronics, advanced materials, New business directions and opportunities in the fields of micro-display technology open up new development space for the company.