\u3000\u3 China Vanke Co.Ltd(000002) 241 Goertek Inc(002241) )
Event: the company released the first quarterly report of 22 years and released the interim performance forecast.
In the first quarter, the company’s 22q1 revenue was 20.1 billion yuan, a year-on-year increase of 43%, the net profit attributable to the parent was 900 million yuan, a slight decrease of 7% over the same period, and the net profit not attributable to the parent was 880 million yuan, a year-on-year increase of 46% (in the range of 40-50% in the previous forecast); The gross profit margin and net profit margin in the first quarter were 13.7% / 4.5% respectively (12.8% / 3.7% in 21q4). Highlights and reasons for performance: 1) the revenue of intelligent hardware was 10.1 billion yuan, with a year-on-year increase of 125%. VR maintained a high boom, and the shipment and profitability of customers in North America continued to be high. At the same time, the share of game consoles increased, and the volume of new hardware such as wearable accelerated; 2) The revenue of intelligent acoustic machine was 6.5 billion yuan, with a year-on-year increase of 6%, which grew steadily driven by the new machines of key customers; 3) VR’s profitability continued to improve, new products such as headphones, wearables and game consoles climbed smoothly, the company’s profit margin increased steadily month on month, while operating cash flow (a year-on-year increase of 68%), inventory level and various turnover rates remained healthy; 4) The net profit attributable to the parent company decreased slightly compared with the same period last year, because the investment income of about 400 million in the same period last year was non economic.
The guidance of the interim report is as strong as ever: the company predicted that the performance of 22h1 was 20-40% year-on-year, and the corresponding net profit attributable to the parent company was 2.08-2.42 billion yuan, deducting 1.90-2.18 billion yuan of non net profit, of which the net profit attributable to the parent company in Q2 was 1.18-1.52 billion yuan (a year-on-year increase of 55-100%) and deducting 1.02-1.3 billion yuan (a year-on-year increase of 26-61%), slightly exceeding the market expectation. We believe that the company’s q1-q2 performance has maintained a high growth as always, due to the high prosperity of VR orders (Q2 shipments are expected to increase significantly year-on-year / month on month), the continuous release of new hardware output such as game consoles, and the further embodiment of the overall control effect.
The prospects of various products continue to improve: 1) VR logic is expected to continue to deliver: in the short term, North American and Chinese customers will drive a significant increase in shipments, and in the medium term, the mass production of new products such as high-end versions of North American customers and Japanese customers will bring incremental elasticity. In the long term, based on various factors such as the improvement of VR ecology, the expansion of application scenarios and the entry of more technology giants outside China, VR / AR hardware shipments are expected to continue to maintain rapid growth in the next few years; 2) Other product lines blossom: TWS earphones grow steadily (it is expected to be listed in the second half of the year), the shipment of game consoles supplied by the company as the second supplier continues to grow, and China’s key customers focus on smart wear. This year’s revenue and profit will have a significant incremental contribution. We continue to be optimistic about the company’s core competitiveness and long-term growth trend. VR / AR is the highlight of the company, but the company not only has VR / ar.
Profit forecast and investment suggestions
We maintain the company’s forecast of earnings per share of 1.75, 2.29 and 2.81 yuan respectively in 22-24 years. According to the 22-year PE valuation level of comparable companies, the corresponding target price is 40.25 yuan, and maintain the buy rating.
Risk tips
VR / AR development fails to meet expectations; TWS earphone sales did not meet expectations; Risk of global epidemic deterioration.
