"Goretek: Wireless Earphone Growth Will Continue Despite COVID-19 Impact"

Last Year, Wireless Earbuds and Wearable Bands Market Showed Steady Growth
AirPods Pro Success Expected to Drive 40-60% Net Profit Growth in Q1

[Asia Economy Reporter Minji Lee] Goretek is expected to show stable growth this year despite the impact of the novel coronavirus disease (COVID-19). Although short-term difficulties are anticipated due to the smartphone slump, it is believed that the growth of major clients such as Apple will continue.

According to Samsung Securities data on the 18th, Goretek's revenue last year was 35.15 billion yuan, an increase of about 48% compared to the same period the previous year. Net profit was 1.28 billion yuan, up 47.6% during the same period. The growth in performance was driven by a 117.6% increase in sales from the smart audio device (TWS earphones ODM) business compared to the previous year.

In the first quarter of this year, net profit is expected to grow by 40-60% compared to the previous year. Researcher Cheolmin Kim of Samsung Securities explained, “This is due to the growth of TWS earphones, and as of last year, the largest client’s market share in the company is estimated to be 40.6% Apple,” adding, “This year, a large number of Android-oriented TWS products including Xiaomi and Huawei will be released.”

Considering that the AirPods Pro model began to gain significant popularity from the second half of last year, it is expected that double-digit growth compared to the previous year will continue in the first half due to the base effect.

The smart device manufacturing business grew by 28.5% year-on-year last year. The main smart device products produced by the company are wearable bands and VR/AR headsets. While wireless earphones showed rapid growth in a short period, the wearable band market recorded steady growth with a 60% increase compared to the previous year. Researcher Kim said, “The stable growth of the company’s business division will continue,” and forecasted, “The VR/AR headset will also maintain a competitive edge as a major global ODM company.”

This year, the smartphone market is believed to have faced short-term difficulties due to decreased demand caused by COVID-19. However, the downward revision of Apple’s expected AirPods sales of 80 million units this year has not appeared so far, so it is expected that demand will not be affected compared to other IT devices.

Researcher Kim said, “Considering the possibility of winning ODM orders for Apple premium products to be released in the second half of the year, the company will meet its 40% growth target this year,” and added, “In the short term, the stock price decline due to COVID-19 makes it highly attractive for investment.”

This content was produced with the assistance of AI translation services.