After handing over a brilliant 2021 financial report, Goertek (002241.SZ) had a surprise in the first quarter of 2022 - the deduction of non-net profit increased by more than 40% year-on-year, and the main business continued to improve; research and development continued to increase, the control of fees was stable, and the cash flow improved significantly.
On the evening of April 26, Goertek released the first quarter performance report of 2022, from January to March this year, the company achieved operating income of 20.112 billion yuan, an increase of 43.37% year-on-year; net profit after deducting non-recurring gains and losses of 878 million yuan, an increase of 46.06% year-on-year.
For the reasons for the change in performance, Goertek said in a quarterly report forecast previously released that compared with the same period last year, it was mainly due to the increase in sales revenue and profitability of the company's VR virtual reality, smart game consoles and other products.
While the main business continues to improve, the intelligent hardware business led by VR/AR is shining. In the first quarter of this year, the business achieved revenue of 10.144 billion yuan, an increase of 125.05%, accounting for more than 50% of the total revenue, becoming the main revenue of Goertek in the first three months of this year.
On April 27, the day after the release of the first quarterly report, boosted by the good news, Goertek shares opened high and then rose strongly, once rising more than 9%. The total intraday market value exceeded 100 billion.
Looking forward to the whole year, in 2022, the global VR/AR product shipments are expected to increase significantly, and the track where Goertek shares are located - VR/AR, smart wear, TWS, smart home, etc., the overall prospect of the industry is good, and the company's first release bureau advantage is expected to continue to be highlighted.
Some analysts believe that under the background of the increase in the self-sufficiency rate of semiconductor domestic components, the steady growth of the TWS downstream market and the rapid increase in VR/AR shipments will promote the rapid development of the company's intelligent acoustic machine and intelligent hardware business, driving Goertek to enter a fast growth channel.
Smart hardware revenue surged 125%, contributing 50% of revenue
In the first quarter of this year, Goertek achieved revenue of 20.118 billion yuan, an increase of more than 40% year-on-year. Among them, the performance growth potential of the intelligent hardware sector is further reflected, contributing more than 50% of the quarterly revenue.
During the above period, in terms of the income of each main business, the income of precision components was 3.153 billion yuan, a decrease of 1.42%; the intelligent acoustic machine was 6.469 billion yuan, an increase of 6.10%; and the intelligent hardware was 10.144 billion yuan, an increase of 125.05%.
Intelligent hardware has become one of the driving engines for the high growth of Goertek.
Combing the company's recent financial reports, it can be found that overall, the revenue sustainability of the smart hardware business sector is emerging.
Looking back, in 2020, smart hardware has become the fastest growing business segment of Goertek's revenue. In that year, the sector achieved revenue of 17.652 billion yuan, an increase of 107.34% year-on-year; in 2021, Goertek achieved operating income of 78.221 billion yuan, of which smart hardware achieved revenue of 32.809 billion yuan, an increase of 85.87% year-on-year, accounting for more than 40% of the total revenue, becoming the product line that contributed the largest contribution to revenue in 2021.
In the first quarter of 2022, the company's financial data that is worth paying attention to is also that the cash flow of Goertek shares is good.
From January to March this year, the net cash flow from operating activities was 1.466 billion yuan, a sharp increase of 67.93% year-on-year. In this regard, the company said that the main reason is that the company's sales scale has expanded and the sales collection has increased.
This was also reflected in last year's annual report. For the whole year of 2021, the net cash flow generated by goertek's operating activities 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.
"The company's VR foundry business is bound to high-quality large customers, customers cover the world's mainstream VR headset brands and reach long-term in-depth cooperation, including Facebook, Sony and Pico, etc., exclusive FOUNDRy Facebook Quest2, high-end VR headset shipments account for more than half of the global total." In the future, with the further rise of global demand for VR/AR, the company's intelligent hardware business is expected to continue to grow. Everbright Securities pointed out.
In the first quarter, a billion R&D expenses were spent
Goertek attaches great importance to R&D investment, which continues to be reflected in the latest financial report.
In the first quarter of 2022, Goertek's R&D expenditure was 1.114 billion yuan, an increase of 58.07% year-on-year. As for the increase in expenses, the company explained that it was due to increased R&D investment in virtual reality, acoustics, optics and other fields.
In the whole year of 2021, the company's R&D investment 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. Specific R&D investment projects, "MEMS sensor and microsystem module R & D project", "VR/AR precision optics and module R & D project", "TWS smart wireless headset R & D project", "smart wireless lightweight AR glasses R & D project" are listed.
From the perspective of the competitive landscape of brand enterprises, some analysts believe that the competitive landscape of the global technology and consumer electronics industries may continue to show a concentrated trend.
The development and maturity of emerging smart hardware in the post-mobile era requires a lot of investment in scientific and technological innovation and technology research and development, and the "soft power" of the intelligent hardware ecosystem such as developer groups, user base, software applications, entertainment content, social stickiness, and data monetization capabilities has become crucial.
In the 2021 annual report, in the analysis of core competitiveness, Goertek wrote that the company actively explored the upgrading of intelligent manufacturing models. In the fields of automation, machine vision and artificial intelligence related to intelligent manufacturing, the company continues to invest in independent research and development, while drawing on international leading experience, introducing advanced technology and core equipment with world-class level and system integration, and continuously improving all aspects of production and manufacturing by applying information technology, automation, artificial intelligence and other technologies.
The industry has broad prospects, and global VR/AR shipments are expected to increase significantly
From the perspective of industry development prospects, the outbreak of VR/AR industry is gradually approaching, and the advantages of Goertek's share card slot are clear, and the first release bureau of VR/AR is expected to enter the harvest period.
According to the data, Goertek began to lay out VR as early as 2012, and entered the AR field in 2016. In 2021, VR ushered in the outbreak, in the past 10 years, Goertek, together with the industry's leading brand manufacturers Meta, Sony, Lenovo and other customers and Qualcomm and other well-known strategic partners to complete a number of star VR/AR products research and development and mass production listing, so that Goertek to achieve a large number of technical solutions and manufacturing experience accumulation. At present, Goertek can provide one-stop solutions including VR/AR product design, research and development and manufacturing.
According to the forecast data of digitimes, a well-known consulting organization, in mid-2022, global VR/AR product shipments are expected to reach 19.1 million units, an increase of about 67.5% year-on-year, and the average compound annual growth rate from 2022 to 2025 is expected to reach about 59.2%.
With the continuous upgrading and iteration of VR virtual reality hardware products, the steady increase in the number of end users, and the continuous development and maturity of virtual reality application scenarios and application content such as social, gaming, entertainment, and live broadcasting, VR virtual reality products are expected to maintain rapid growth in the next few years.
Judging from the layout of Goertek shares, as one of the pioneers of the VR/AR industry chain, the company has a good technical accumulation in terms of parts and components, machine assembly and so on.
Pacific Securities analysis said that Goertek's fixed increase project VR/AR-related projects are expected to enter a climbing state this year. "The current card slot advantage has been quite clear, and it is expected to fully benefit from the rapid growth of the industry in the future." Its representation.
For the 2022 business plan, Goertek mentioned in the 2021 annual report that one of the key points is to strengthen business expansion and create new business growth points.
"On the basis of consolidating the company's existing competitive advantages in the field of precision components and intelligent hardware products, we 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 acquire core customers, and actively pay attention to and follow up on automotive electronics, advanced materials, New business directions and opportunities in the fields of micro-display technology open up new development space for the company. Goertek said.
At the same time, the company will actively grasp the new opportunities for industrial development in the post-mobile era, and deepen the implementation of the company's strategy of "precision components + intelligent hardware machine". 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.