Following the reduction of revenue growth requirements, Goertek recently adjusted the performance assessment requirements of equity incentives again, adding a net profit index attributable to the parent company, with a target of 3.047 billion yuan in 2026, while the company recorded 4.275 billion yuan in 2021.
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The performance appraisal requirements were adjusted again, and the target for 2026 was restored to 71% of the 2021 level
On June 28, Goertek (002241. SZ) disclosed a series of announcements related to equity incentives.
Goertek said that since the second half of 2022, the company's profitability has declined for a short time, and it is the primary business task at this stage to quickly adjust the company's operations to adapt to industry changes and quickly realize the repair and improvement of profitability. In order to fully motivate the core backbone team, the company plans to adjust the performance appraisal indicators, stock trading restriction period, exercisable date and other relevant provisions in the "Jiayuan No. 6" and "Jiayuan No. 7" employee stock ownership plans and the 2023 stock option incentive plan.
Before this adjustment, the 2024-2026 performance assessment target set by the "Jiayuan No. 6" employee stock ownership plan is that the operating income will increase by no less than 36%, 66% and 98% respectively compared with 2021, and the operating income in 2021 will be 78.221 billion yuan, that is, the revenue in 2024-2026 will not be less than 106.381 billion yuan, 129.848 billion yuan and 154.878 billion yuan respectively.
The 2024-2026 performance assessment targets set by the "Homeland No. 7" employee stock ownership plan are operating income of no less than 106.382 billion yuan, 129.848 billion yuan and 154.879 billion yuan respectively, and the 2024-2025 assessment targets set by the 2023 stock option incentive plan are no less than 106.382 billion yuan and 129.848 billion yuan respectively, which is basically the same as the assessment requirements of the "Homeland No. 6" employee stock ownership plan in the corresponding year.
After this adjustment, the company's performance assessment target adds a net profit indicator on the basis of the above-mentioned operating income indicators, that is, the net profit attributable to the parent company from 2024 to 2026 will increase by no less than 100%, 140% and 180% respectively compared with 2023. Based on the net profit attributable to the parent company of 1.088 billion yuan in 2023, that is, the net profit attributable to the parent company from 2024 to 2026 will not be less than 2.176 billion yuan, 2.611 billion yuan and 3.047 billion yuan respectively. Only one of the operating income and net profit indicators needs to be met to meet the performance appraisal requirements at the company level.
Soochow Securities Research Report believes that the new indicator sets a higher net profit growth rate in the next three years, indicating that the company is full of confidence in the rapid growth of profits and the recovery of profitability in the future. It predicts that Goertek's operating income from 2024 to 2026 will be 103.480 billion yuan, 123.752 billion yuan and 147.333 billion yuan respectively, and the net profit attributable to the parent company will be 2.316 billion yuan, 3.409 billion yuan and 4.533 billion yuan respectively. Based on the forecast of Soochow Securities, Goertek's operating income in the next three years may not be able to meet the standard, but the net profit attributable to the parent company significantly exceeds the assessment standards set by the company.
According to Goertek's financial reports over the years, the company's net profit attributable to the parent company reached 4.275 billion yuan in the "highlight moment" in 2021, but it fell 59% to 1.749 billion yuan in 2022 and continued to decline by 37.80% to 1.088 billion yuan in 2023. According to the newly set performance appraisal requirements, the net profit attributable to the parent company in 2026 is 3.047 billion yuan, that is, it will recover to about 71% of 2021.
It is worth noting that this is not the first time that Goertek has adjusted its performance appraisal targets.
The "Jiayuan No. 6" employee stock ownership plan was established in July 2022, and the company's performance assessment target was that the operating income from 2023 to 2026 would increase by no less than 40%, 70%, 100% and 130% compared with 2021, and in December 2022, Goertek lowered the growth targets for each period to 12%, 36%, 66% and 98% respectively.
In 2023, Goertek will actually complete its operating income of 98.574 billion yuan, an increase of 26% over 2021, and successfully achieve the adjusted assessment target.
In addition to the performance appraisal, Goertek has also relaxed the trading restrictions in this adjustment.
Previously, Goertek stipulated that within 30 days before the announcement of the company's annual report and semi-annual report, as well as within 10 days before the announcement of the quarterly report, performance forecast and performance express report, the "Jiayuan No. 6" and "Jiayuan No. 7" shareholding plans shall not buy and sell the company's shares, and the incentive objects of the 2023 stock option incentive plan shall not be exercised, and the above time limits are adjusted to 15 days and 5 days respectively.
According to the revised draft employee stock ownership plan, a total of 12 directors, supervisors and senior executives participated in the "Jiayuan No. 6" stock ownership plan, with a total of 7.12 million shares, accounting for 9.59% of the plan's share. The subscription price of the "Homeland No. 6" shareholding plan is 7 yuan / share, and the "Homeland No. 7" is 9.19 yuan / share, as of the close of June 27, Goertek's share price is 18.62 yuan / share.
Last year, the two equity incentives did not meet the conditions for exercising
As the leader of the "fruit chain", Goertek suffered from Apple's headset "cut order" in the fourth quarter of 2022, and the asset impairment provision for the current period was 1.797 billion yuan, mainly due to the inventory impairment provision of 1.203 billion yuan and the fixed asset impairment provision of 579 million yuan, which led to a sharp decline in performance.
In 2023, the company's intelligent acoustic machine revenue will be 24.185 billion yuan, a decrease of 20% compared with 2021, and the proportion of operating income will also decrease from 38.73% to 24.54%. Smart hardware has grown into the company's most important source of revenue, with its main products including VR/AR products, smart wearable products, home electronic game consoles and accessories, smart home products, etc., with revenue of 58.709 billion yuan in 2023, accounting for 60%, compared with about 42% in 2021.
Due to the relatively low gross profit margin of smart hardware projects, the increase in its proportion has lowered the company's overall gross profit margin. According to the data of Choice Financial Terminal, Goertek's comprehensive gross profit margin in 2023 will be 8.95%, compared with 14.13% in 2021.
At the same time, the company will recognize share-based payment expenses of 180 million yuan in 2023, mainly for management personnel of 123 million yuan and R&D personnel of 45 million yuan.
It is worth noting that due to the failure to meet the performance target in 2023, the first exercise period of the company's 2022 stock option incentive plan did not meet the exercise conditions. The 2023 annual performance of its subsidiary, Goertek Microelectronics Co., Ltd. (hereinafter referred to as Goertek), also failed to meet the target, and the third exercise period of its 2020 equity option incentive plan did not meet the exercise conditions.
Goertek is a subsidiary of Goertek Co., Ltd., which is mainly engaged in MEMS sensors, and will be spun off and listed in November 2020. However, in the case of the overall decline of Goertek's shares, it is difficult for Goertek to "stand alone". In May 2024, Goertek announced the withdrawal of its listing application documents and the termination of the spin-off.
Before the spin-off failed, Goertek purchased 1.85% of the shares of Goertek held by minority shareholder Jiang Long with its own funds of 23.2738 million yuan in October 2023. Jiang Long is the younger brother of Jiang Bin, the actual controller of Goertek, who joined Goertek in 2004, joined the board of directors of Goertek in 2017, and served as chairman in October 2020.
Jiang Long's shareholding came from Goertek's equity incentive in September 2020, when the acquisition cost was 21.5 million yuan. In April 2023, Jiang Long resigned as vice chairman and president of Goertek and simultaneously withdrew from the board of directors of Goertek.
At present, Jiang Long directly holds 250 million shares of Goertek, with a shareholding ratio of about 7.32%. In June 2023, Jiang Long pledged 65 million shares to China Merchants Securities out of "personal capital needs", and extended the pledge period for one year on June 1, 2024, the original maturity date. According to the data of Choice Financial Terminal, Jiang Long's past equity pledge has reached the estimated liquidation line many times.
In addition to the acquisition of a minority stake in Goertek, Goertek will also acquire Yuguang Technology (Shaoxing) Co., Ltd. (hereinafter referred to as Yuguang Technology) through its subsidiary Goertek Optical Technology Co., Ltd. in 2023, further strengthening the layout in the fields of micro-nano optical devices, projection/display modules and three-dimensional sensing, and forming a goodwill of 588 million yuan.
At present, Yuguang Technology is still in a state of loss. At the 2023 annual results briefing, an investor asked "whether the acquisition of Yuguang Technology will drag down the company's performance", and Goertek responded that the acquisition of Yuguang Technology aims to strengthen the company's layout in the optical field, and Yuguang's business will be integrated with the company's optical product-related business to achieve complementary advantages and give full play to the synergistic effect of the business combination.
In the first quarter of 2024, Goertek achieved revenue of 19.312 billion yuan, a year-on-year decrease of 19.94%, but the net profit attributable to the parent company increased by 257.47%, from 106 million yuan in the same period of the previous year to 380 million yuan. The company said at the brokerage strategy meeting that profitability improved significantly in the first quarter, and the terminal demand of the consumer electronics industry is expected to recover in the future, which will have a positive impact on the order demand for the company's main products.