GoerTek: Steady Stocking, Meta's Flat Performance, When Will VR/AR 'Make a Big Move'?

GoerTek Inc. released its third-quarter 2025 financial report (as of September 2025) after the close of the A-share market on the evening of October 24, 2025, Beijing time. The key points are as follows:

I. Overall Performance: Revenue & Gross Margin, Both Rebounded.

① GoerTek's total revenue for the third quarter of 2025 was RMB 30.6 billion, up 4.4% year-on-year, better than the market expectation (RMB 28 billion). The growth in revenue was mainly driven by downstream customers' stocking, partly in preparation for the September launch of new products such as iPhone, AirPods, and MR; $Goertek(002241.SZ)

② The company's gross margin for the quarter was 12.8%, an increase of 1.4 percentage points year-on-year. With the recovery of downstream order status, it is expected that the gross margins of the company's three major businesses will all improve, with the gross margins of smart acoustic devices and smart hardware both rebounding to around 10%;

II. Expenses and Operating Conditions: Reasonable Inventory Growth, Core Expenses Increased.

① GoerTek's inventory for the third quarter of 2025 was RMB 16.3 billion, up 14% year-on-year. Driven by the stocking of new downstream products, the absolute value of the company's inventory increased, but the inventory/revenue ratio remained within a relatively reasonable range.

② The company's core expense ratio for the quarter was 8.1%, an increase of 1.2 percentage points quarter-on-quarter, with sales expenses, R&D expenses, and management expenses all increasing to varying degrees. The company achieved a net profit attributable to the parent company of RMB 1.17 billion for the quarter, up 4.5% year-on-year, similar to the revenue growth rate, with the increase in gross margin and operating expenses roughly offsetting each other.

Dolphin Research's Overall View: The overall performance is quite good, but attention is still needed on the progress of AR/VR new products

GoerTek's revenue and gross margin performance for the quarter were both good, with revenue growing 4.4% year-on-year, better than market expectations. The gross margin, affected by seasonal factors, declined slightly, but 12.8% is still a good performance.

Given the relatively limited data in the third-quarter report, combined with GoerTek's interim report: ① The smart acoustic device business is relatively sluggish, but with Apple's launch of new AirPods in September, the second half of the year is expected to be better than the first half; ② The smart hardware business has stopped its downward trend, but the market's anticipated new Meta products in September did not bring "surprises"; ③ The precision component business maintained double-digit growth, mainly benefiting from the recovery in demand for downstream electronic products and increased product stocking.

Compared to the revenue side, the company's gross margin still shows an upward trend, especially since the company's gross margin has remained above 12% for three consecutive quarters this year, mainly driven by the improvement in the gross margins of smart hardware and precision components. Currently, the gross margins of smart hardware and smart acoustic devices have rebounded to around 10%, while the gross margin of precision components has remained stable above 20%.

Considering GoerTek's current market value (RMB 116.5 billion), it corresponds to approximately 26 times PE for the 2026 net profit (assuming revenue +15%, gross margin 11.8%, tax rate 10%). Referring to the company's historical range (20xPE-40xPE), the current valuation is roughly at the lower end of the range.

Overall, GoerTek's performance for the quarter was quite good, with revenue and gross margin showing an upward trend. Compared to the smart acoustic device and component businesses, the company has focused more on smart hardware, which now accounts for more than 50% of revenue. Therefore, compared to the launch of new Apple products, the market is actually more concerned about the performance of new AR/VR products.

Considering the company's smart hardware, both revenue and gross margin have rebounded, reflecting signs of recovery in the VR/AR industry from the bottom. However, the new products released by Meta this time did not bring "surprises", leading to a wave of stock price corrections in September, indicating that the "explosive period" for VR/AR still needs to be awaited.

Although the rebound in revenue & gross margin can bring some confidence to the market, stock price performance still requires positive factors in VR/AR and other areas to drive it. Only when there are truly "blockbuster" products in VR/AR in the future will the company's value be more clearly reflected.

The following are GoerTek's financial report and related data charts: