Billion-Dollar Acquisition, Strategic Partnership with Plessey: Goertek Bets Big on AR｜Hardcore Tech
Author | Geng Chenfei
Editor | Song Wanxin, Huang Yida
In the past month, Goertek has successively made arrangements in the upstream of the AR industry chain. First, it acquired two precision structural component companies, Hong Kong Midea and Changhong Industrial, for HK$10.4 billion (approximately RMB 9.5 billion). Then, through its subsidiary, it provided a US$100 million interest - bearing loan to Haylo to support Haylo's cross - border acquisition of British Micro - LED giant Plessey.
Relevant information shows that Hong Kong Midea and Changhong Industrial were among the original manufacturers of Apple's mobile phone structural components. As Apple launched its watch business, the two companies became one of the core suppliers of the metal middle frames for Apple watches. Plessey is quite famous in the Micro - LED field and has been a display technology supplier for Meta for many years.
Previously, the transformation to VR did not meet expectations. Apparently, Goertek is now fully shifting its focus to AR. While integrating upstream resources of the supply chain, it is also further binding with leading terminal customers through investment.
So, what benefits can the two acquisitions bring to Goertek? Can AR support Goertek's performance?
01 AR Comeback
In the announcement of acquiring 100% equity of Hong Kong Midea, a wholly - owned subsidiary of Hong Kong Lianfeng, and Changhong Industrial, Goertek stated that the acquisition aims to enhance the company's comprehensive competitiveness in the field of precision structural components, deepen vertical integration capabilities, and continuously consolidate cooperation with leading customers in the industry.
From the content of the announcement, it can be seen that the purpose of this acquisition is to supplement the precision metal processing capabilities. Precision structural components are crucial for AR glasses in affecting the equipment's lightweight level. Mirco - LED, which Plessey specializes in, is generally considered the ultimate solution for the next - generation display technology. Both are technological high - grounds that must be conquered to develop consumer - grade AR glasses.
Therefore, at the time when AR glasses products are booming this year, Goertek hopes to strengthen its technological reserves in high - barrier AR technologies through these two acquisitions. The newly acquired assets and the original precision structural component business will form synergistic and scale effects through complementary advantages, enabling Goertek to take a leading position in advance.
Currently, Goertek has made arrangements in aspects such as acoustic components, optical modules, and diffractive optical waveguides for AI/AR glasses. Among them, optical engines and optical waveguides are high - technology - barrier and high - value - added segments. Goertek has significant technological advantages and launched the lightweight AR reference designs Mulan 2 and Wood 2 at CES 2025.
The biggest highlight of Mulan 2 is that it is equipped with holographic waveguide lenses and a Micro LED optical engine. It is designed to be lightweight and has minimal light leakage. The highlights of Wood 2 include technologies such as an ultra - light material front frame and an ultra - small SiP module, supporting full - color display, multi - modal AI interaction, etc.
Currently, Goertek has won some orders in the AR business. According to information from 21st Century Business Herald, Goertek has become a supplier of optical components, acoustic modules, and an OEM manufacturer for AI glasses or other products of companies such as Huawei, Samsung, Xiaomi, Meta, and Amazon.
Lu Kelin, an internationally registered innovation management expert, revealed to 36Kr that by offering a combined quotation of "whole machine + shell + antenna", Goertek can offer prices 3% - 5% lower than its competitors for AR glasses and smartwatch products. The obvious cost advantage gives it stronger bidding capabilities.
"Based on the projection of 220 million global smartwatch shipments and 9 million AR glasses shipments in 2025, if Goertek wins 15% and 20% of the shares respectively, the incremental revenue will reach 22 billion to 26 billion yuan, equivalent to 25% - 30% of its total revenue in 2024." Lu Kelin added.
Calculated based on the industry's average net profit margin of 10% - 13%, Haitong International believes that this acquisition may increase Goertek's potential profit by 25% - 30%.
From the perspective of the business structure, Goertek currently has three major business pillars: smart hardware, smart acoustic whole machines, and precision components. Among them, the smart hardware business is the foundation of Goertek's revenue. According to the semi - annual report data in 2025, the corresponding revenue accounts for 54%. In the same period, the revenue of the smart acoustic whole - machine business accounted for 22%. However, the gross profit margins of these two businesses have been hovering around 10% in the past two years.
"The average gross profit margin in the smart hardware and smart acoustic whole - machine industries is 15% - 20%. Goertek is significantly lower than the first - tier companies." In Lu Kelin's view, Goertek's model of trading scale for market share has compressed a certain profit elasticity.
In contrast, the precision component business, which currently has the smallest revenue share, has shown more prominent performance in both profit growth and profitability. This business achieved a revenue of 7.6 billion yuan in the first half of 2025, a year - on - year increase of 21%, and the growth rate has accelerated compared to 2024. The corresponding revenue share is about 20%, an increase of 5 percentage points compared to the end of 2024. The gross profit margin in the same period was 24%, a slight increase of 2 percentage points compared to the end of 2024.
It can be seen that although the precision component business currently has a relatively small revenue share, due to its high - value - added characteristics and the fact that it is in a high - growth stage, after the low - base effect has disappeared, this business has become the core driving force for the company's performance growth. Moreover, with the optimization of the revenue structure, this business also provides certain support for Goertek's profitability.
02 The Medium - Term Increment of AI/AR is Quite Considerable
Currently, AI/AR glasses are the focus of Goertek's development. The 2024 annual report shows that among the 9 R & D projects Goertek is promoting, at least 4 are related to AI/AR glasses. Betting on AR has become a necessary choice for Goertek and is an effective way to break free from excessive dependence on Apple. This intention is also reflected in Goertek's recent investment in Plessey.
In 2020, Meta reached an agreement with Plessey, obtaining exclusive technical authorization for the latter's AR displays and promising to purchase all the AR screens produced by Plessey.
The transaction structure of Goertek's investment in Plessey is that Goertek's Hong Kong subsidiary provides a loan of no more than US$100 million to the British company Haylo. The purpose of the loan is for Haylo to acquire all the equity of Plessey and support its expansion. What is most noteworthy is that this loan comes with equity income rights. If Haylo or Plessey is acquired or goes public through an IPO within five years, in addition to fully recovering the principal and interest of the loan, Goertek will also receive 25% of the total value of Haylo or Plessey's acquisition or the total market value of its listing as its revenue share.
From the perspective of the transaction structure, the underlying logic of this debt investment is that when Goertek integrates high - tech assets, it uses investment to avoid certain risks of mergers and acquisitions. While ensuring a stable return, it also gains the opportunity for potential high returns in the future. It can be said to be a win - win situation.
At the technical level, Goertek mentioned in the announcement related to this investment that "micro - display technologies represented by Micro - LED technology are expected to be widely used in future AI smart glasses and AR augmented reality products."
Therefore, with Goertek's support, Haylo's investment and integration of Plessey will enable Plessey to achieve greater development in the Micro - LED field and promote the maturity of relevant technologies and products. This will have a positive impact on Goertek's future business expansion in the fields of AI smart glasses and AR augmented reality.
Goertek's investment in Plessey continues its continuous layout in the optical field. In 2018, Goertek invested in the British optical waveguide technology company WaveOptics and also bought 10% of the equity of the American micro - display company Kopin in the same year. In 2023, Goertek wholly acquired the domestic micro - nano optical enterprise Shangyu Optoelectronics Technology at a valuation of 1.119 billion yuan. In addition, Goertek currently holds a 5.4% equity stake in Shiya Technology, a leading Micro - OLED enterprise.
The most core part of an AR whole machine is the optical display unit. According to data from iResearch, the optical display unit accounts for up to 43% of the BOM. Therefore, in addition to improving the technical level, the main purpose of deeply cultivating the optical business is to supplement relevant capabilities in AR micro - display, which also means that Goertek's profit margin in the AR business can be further expanded.
In the medium term, the revenue increment brought by large customers' AR glasses may be an important marginal force for Goertek's performance growth.
Market news says that Goertek is the exclusive supplier of the core optical module of Xiaomi's first consumer - grade AR glasses launched in June this year. According to the consistent forecast of Wind, Goertek's revenue in 2025 is about 102.36 billion yuan, an increase of 1.41 billion yuan compared to 2024, with a corresponding year - on - year growth rate of 1.4%.
Goertek's revenue growth has slowed down significantly in the past two years, mainly because the products of some customers in the smart hardware business are in the middle and later stages of their life cycles, and the sales volume has shown a significant year - on - year decline, which has suppressed Goertek's revenue to a certain extent. Moreover, according to the consistent revenue forecast, the above - mentioned impact still exists at the end of 2025.
Looking at the impact of AR on Goertek's performance, according to market calculations, based on Xiaomi's sales target of 500,000 AI glasses in 2025, it can contribute 200 million to 250 million yuan in revenue to Goertek. Based on the current market's consistent forecast of Goertek's revenue, the incremental revenue contributed by Xiaomi's AI glasses alone this year accounts for 1/7 of Goertek's expected revenue growth in the same period. If other OEM revenues related to AI glasses or optical components are added, the revenue increment brought by the AR business will be very considerable.
It can be seen that as the AR industry is about to experience explosive growth, Goertek is at a critical stage of kinetic energy transformation. The AR business will not only replace the smart hardware business to open up new growth space for the company but also, with its high - value - added characteristics, become an important support for promoting Goertek's profitability and increasing its performance.
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