GoerTek (002241.SZ) 3Q26 Miss on Soft Margin; XR Beneficiary Intact

GoerTek's 3Q26 results were a miss. Revenue declined 8% YoY to Rmb28.2bn. GM missed likely due to product mix. NP came in at Rmb1,153mn (-2% YoY), below CitiE by 5%. Incorporating 3Q26 results, we maintain TP of Rmb27.0 with (1) 2-17% downward revision on 2026-28E EPS as we incorporate latest assumptions on smartphones, AI smart glasses and VR shipment; while (2) roll over to 2027E EPS still based on 23x P/E. We expect GoerTek to benefit from MEMS microphone upgrade for AI smartphone and edge devices, new camera-AirPods and AI smart glass pickup in 2027. Next catalysts: (1) CES 2027 in January with many AI glasses and edge devices, (2) Meta's launch of next gen AR glasses in Spring, (3) camera Airpods launch and Apple AI glasses launch. We believe most weakness in consumer electronics is well priced-in;