\u3000\u3 China Vanke Co.Ltd(000002) 241 Goertek Inc(002241) )
Intelligent hardware and wearable terminals are getting better and better, driving the company’s profits to rise and maintaining the “buy” rating
The company announced that in 2022q1, the operating revenue was 20.11 billion yuan, yoy + 43.4%, and the net profit attributable to the parent company was 900 million yuan, yoy-6.7%, deducting the net profit not attributable to the parent company of 880 million yuan, yoy + 46.1%. The difference in non recurring profits and losses mainly came from the income from changes in the fair value of kopin Corporation held by the company. At the same time, the company guides 2022h1 to realize the net profit attributable to the parent company of RMB 2.08-2.42 billion, yoy + 20 ~ 40%, deducting non net profit of RMB 1.90-2.18 billion, yoy + 35 ~ 55%. We maintain the profit forecast for 20222024. It is expected that the company will realize a net profit attributable to the parent company of 5.91/73.7/8.58 billion yuan, yoy + 38.2% / 24.8% / 16.4%, EPS of 1.73/2.16/2.51 yuan, and the current share price corresponding to PE of 17.6/14.1/12.1 times. Considering the starting volume of the company’s new VR terminals, we maintain the “buy” rating.
The revenue of intelligent hardware business doubled, and the profitability of 2022q1 increased month on month
In terms of business, the company’s intelligent hardware business grew rapidly, realizing an operating revenue of 10.14 billion yuan, yoy + 125.1%, and the business of precision parts and components and intelligent acoustic machine remained stable, of which the operating revenue of precision parts and components was 3.15 billion yuan, yoy-1.4%, and the business of intelligent acoustic machine was 6.57 billion yuan, yoy + 6.1%. In 2022q1, the company achieved gross profit rate of 13.7%, QoQ + 0.9pct, net profit rate of 4.5%, QoQ + 0.8pct. The profits of VR products of the company are gradually improving, the capacity utilization rate of game console products is full, the new TWS headphones are climbing, and the profits are climbing driven by multi product portfolio. The company’s inventory in 2022q1 was 12.79 billion yuan, an increase of 5.8% over 2021q4, maintaining a stable operation. Looking forward to 2022q2, the company’s profit guidance will maintain rapid growth, and the depreciation of RMB will be beneficial to the company in the short term. Considering the quotation agreement with customers, the product price will be adjusted appropriately with the change of exchange rate, and the medium and long term will be controllable.
The company’s technology accumulation and manufacturing process continue to improve, which is expected to maintain competitiveness in the field of intelligent terminal manufacturing
On the content side of VR / AR products, in addition to traditional games, content related to culture, tourism and education is expected to continue to be launched and introduced to more users. On the hardware side, the control mode of VR products is changed from the existing handle to EMG and eyeball control. Seethrough’s XR products are launched. Various new technology iterations are expected to enhance the stickiness of intelligent hardware. The competitiveness of manufacturers that only consider the whole machine assembly may be weakened in the future, and the company is expected to deepen its competitiveness in the AR / VR field through technology accumulation and manufacturing process improvement, vertical integration of upstream, and long-term cooperation with customers.
Risk tip: the downstream VR product iteration is not as expected, the competition pattern of VR / AR assembly business deteriorates, the cost of upstream raw materials rises, and the risk of exchange loss.
