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AAC Technologies Holdings Inc 02018

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Morningstar’s Analysis

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AAC Tech’s Optics Execution Remains Key for Re-Rating; Acoustic Upgrade May Be a One-Year Story

Phelix Lee Equity Analyst

Analyst Note

| Phelix Lee |

We maintain our fair value estimate on AAC Technologies at HKD 42 per share due to more bullish optics revenue forecasts, mostly in wafer level glass, or WLG, and camera module sales, which are offset by more conservative acoustic gross margin assumptions as we believe speaker upgrades will not benefit AAC as much as we hoped. We believe WLG and camera modules will contribute about 45% of 2025 optics revenue, from less than 5% in 2020, as AAC benefits from smartphone upgrades and vehicles packing more cameras. But the main factor that prevents us from recommending the stock is AAC has yet to prove how it competes with strong players looming in the optics segment.

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Company Profile

Business Description

AAC Technologies is one of the world’s largest manufacturers of miniature acoustic components, such as speakers and receivers, for smartphones, which account for 44% of its 2020 revenue. Founded in 1993, the company has since then expanded into the production of other handset components, such as electromagnetic drives (haptics), precision mechanical (metal casing), lenses and camera modules, which combined make up 56% of the firm’s sales.The firm is also engaged in the production of MEMS microphones, 3D glass, RF antennas, and headsets. AAC is headquartered in Shenzhen, China and runs factories in China, Vietnam, Czechia and Malaysia, employing over 33,000 people.

38 Gloucester Road, Unit 1605-7, China Evergrande Centre
Hong Kong, Cayman Islands
Sector Technology
Industry Communication Equipment
Most Recent Earnings
Fiscal Year End Dec 31, 2020
Stock Type
Employees 33,735