Goertek Annual Report Highlights

Compared with 2017, Goertek’s 2018 annual report offers little that feels new, and management shares few views on the industry or the company’s future — perhaps because many shareholders don’t actually read annual reports. A few highlights:

• In 2018, quarterly revenue increased sequentially each quarter. This mirrors the trend in the 2017 report. It’s not a “recovery,” but rather a pattern consistent with industry seasonality.
• In 2018, the company received RMB 150 million in special funds from Weifang for building a RMB‑100‑billion‑class enterprise. Weichai Power and Goertek are the two firms named in Weifang High‑tech Zone’s major project list for new and old growth drivers, implying a supportive policy environment.
• In October 2018, to stabilize exports, the State Council raised export VAT rebate rates effective November 1. Items at 15% and some at 13% were lifted to 16%; 9% to 10% (some to 13%); and 5% to 6% (some to 10%). This directly benefits electronics. As a key components supplier to global consumer electronics, heavily reliant on Apple and other major customers, Goertek benefited. “Other receivables” fell 44.46% in 2018.
• During the reporting period, revenue was RMB 23,750.59 million, down 6.99% YoY; the top five customers accounted for 66.45%. Net profit attributable to shareholders was RMB 867.72 million, down 59.44% YoY. Cost of sales was RMB 19,281.92 million, down 3.19% YoY. Precision components (mainly WeChat mics and speakers) contributed 41.82% of revenue (prev. 59.78%); intelligent acoustics (headsets/speakers) 28.68% (prev. 40.37%); intelligent hardware (game accessories and VR/AR devices) 27.9%. With global smartphone demand weakening, intelligent hardware’s share rose, but yield is the key metric in precision manufacturing. New lines are in yield‑ramp; VR remains in adjustment — both weighing on results. Notably, the Vietnam subsidiary producing AirPods delivered RMB 330 million revenue and RMB 190 million net profit, avoiding tariff shocks.
• The Apple–Qualcomm IP battle and reports that Microsoft collects over US$6 billion per year in Android licensing underscore the importance of patents. In 2018 Goertek filed 3,725 patents (2,006 invention patents) and was granted 514 invention patents. By Dec 31, 2018, cumulative filings reached 15,660 (1,838 overseas), including 6,818 inventions; cumulative grants reached 8,253, with 1,476 invention grants — reflecting strong R&D.
• Danshuiquan, the top private fund that began building its position in April 2014, still holds 1.12% with no rebalancing — apparently steadfast.
• Where the stock goes next hinges on the Q1 2019 report due April 24.

Published at: Apr 20, 2019 · Modified at: Oct 26, 2025