On April 26, Goertek announced its 22-year first quarter report and semi-annual performance forecast. 22Q1 company's operating income was 20.112 billion yuan, an increase of 43.37% year-on-year; net profit was 905 million yuan, down -6.78% year-on-year; and net profit was 878 million yuan, an increase of 46.06% year-on-year.
22 years of semi-annual report forecast: net profit of 2.077-2.423 billion yuan, an increase of 20% -40%; deduction of non-net profit of 1903-2.184 billion yuan, an increase of 35% -55%.
21Q2 net profit of 772 million yuan, if the median value of 2.2 billion yuan is taken according to the forecast range, excluding 900 million yuan of Q1, the Q2 single quarter growth rate is as high as 68%, which will exceed the same period last year (+58.59%).
The decline in Q1 net profit was also explained in the company's first quarter forecast mainly due to the change in the fair value of Kopin Corporation's equity investments, and the non-recurring profit and loss was about 300-340 million yuan lower than that of the same period last year. In addition, it was partly due to the increase in R&D expenses and finance costs.
Specific business points of view:
The company's main revenue contribution shifted from TWS to VR equipment. Q1's profit contribution is mainly from intelligent hardware, during the reporting period, intelligent hardware revenue of 10.144 billion yuan, an increase of 125.05% year-on-year; intelligent acoustic revenue of 6.469 billion yuan, an increase of 6.10%; precision components revenue of 3.153 billion yuan, a year-on-year decrease of -1.42%. The main performance contribution in the quarter was mainly driven by the growth of smart hardware revenue, including VR virtual reality and smart game consoles.
R&D and finance expenses increased
In addition, the company continued to increase R & D investment in virtual reality, etc., with expenditure reaching 1.114 billion yuan, accounting for 5.87% of operating income, an increase of 58.07% year-on-year. Finance expenses increased by 119.96% to 49.05 million, due to interest expense and the impact of exchange rates.
VR sales have entered a rapid growth channel, and the company will continue to benefit
The company's OEM VR products include Meta's Oculus series products, Pico, Sony PS VR and Huawei VR Glass. Among them, Oculus Quest 2 is the star product in VR equipment, with a market share of 80%, which is the exclusive OEM product of Goertek.
Oculus Headset 22 Q1 shipments of about 2.2 million units, last year's full year sales of 8.7 million units, this year's full year sales target of 12-13 million units, is expected to increase by about 40% over last year.
In addition, PIco officially disclosed that it plans to sell 1 million units this year, but the market predicts that the sales target will increase to 2 million units at the highest, compared with 500,000 units last year. Even according to the original sales plan, Pico's sales growth will double. Goertek shares, which are the foundry of these products, will also benefit from this.
Previously, VR/AR annual shipments exceeded 10 million and was seen as an important inflection point for the industry to accelerate penetration. The indicator has been completed at the end of 21 years (11.23 million VR headset shipments in 21 years, an increase of 92.10% year-on-year), which means that VR shipments will enter an accelerated state in the future. In addition, due to the recurrence of the epidemic, the trend of working from home has become normalized, which has increased the demand for home entertainment and become another catalyst for the growth of VR headset sales.
According to the forecast data of VR gyroscope, 2022-2025 is VR/AR shipments will continue to increase, before 2024 the virtual market is mainly based on the sale of VR headsets, AR glasses shipment growth still needs time, AR (augmented reality) materials and technical requirements are much higher than VR, including breakthroughs in optical prisms, Micro-LED, rendering and other technologies.
Summary: Goertek has a first-mover advantage in virtual reality and will enjoy the dividends of VR/AR sales growth within 4 years.