Morningstar

AAC Technologies Holdings Inc 02018

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Stock XHKG Rating as of
HK$31.80 +1.40 (4.61%)
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As of Delayed Price Open

Company Report

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Smartphone Recovery Earns Time for Electronics Suppliers to Tap Extended Reality and Auto Markets

Phelix Lee

Consumer electronics component suppliers Sunny Optical, AAC Technologies, and Luxshare Precision have reported first-half earnings beyond our expectations, but management’s comments are mixed for the next few quarters. We leave our fair value estimates for Sunny and Luxshare unchanged at HKD 60 and CNY 40 per share, respectively, and raise our valuation on AAC to HKD 31 from HKD 23. Sunny is our pick among the three as the narrow-moat firm has a track record of applying its intellectual property to different industries (like cars), and we see Sunny as best-positioned to profit from more powerful cameras equipped on midrange and premium phones. AAC and Luxshare are fairly valued, in our view, as smartphone recovery has been priced in, and growth in automotive segments is less visible than for Sunny.

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Price vs Fair Value

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02018 is trading at a 232% premium.
Price
HK$30.40
Fair Value
HK$27.00
Uncertainty
High
1-Star Price
HK$86.57
5-Star Price
HK$81.70
Economic Moat
Dfcf
Capital Allocation
Ryyxtgtqg

Bulls Say, Bears Say

Bulls

Adoption of new speaker technology by smartphone manufacturers would benefit acoustic market leader AAC, whose strength lies in the design of miniature acoustic components.

Bears

Lack of upgrade in acoustics and haptics technology by smartphone makers could lead to a drop in average selling price and pressure the firm’s top and bottom lines.

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Trading Information

Previous Close Price
HK$30.40
Day Range
HK$29.75–31.85
52-Week Range
HK$12.86–34.60
Bid/Ask
HK$31.75 / HK$31.80
Market Cap
HK$37.27 Bil
Volume/Avg
6.5 Mil / 5.8 Mil

Key Statistics

Price/Earnings (Normalized)
55.91
Price/Sales
1.47
Dividend Yield (Trailing)
0.33%
Dividend Yield (Forward)
0.33%
Total Yield
0.63%

Company Profile

AAC Technologies is one of the world’s largest manufacturers of miniature acoustic components, such as speakers and receivers, primarily for smartphones, which account for under half of its revenue. Founded in 1993, the company has since expanded into the production of other handset components, such as electromagnetic drives (haptics), precision mechanical (metal casing), lenses and camera modules, and MEMS microphones. AAC is headquartered in Shenzhen, China, and runs factories in China, Vietnam, Czechia, and Malaysia. It employed 36,833 people as at June 30, 2024.
Sector
Technology
Industry
Communication Equipment
Stock Style Box
Large Growth
Total Number of Employees
3,683
Website
https://www.aactechnologies.com

Competitors

Valuation

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Metric
02018
3008
02382
Price/Earnings (Normalized)
 55.9116.7527.96
Price/Book Value
 1.49—2.15
Price/Sales
 1.476.551.39
Price/Cash Flow
 6.7312.9315.06
Price/Earnings
02018
3008
02382

Financial Strength

Metric
02018
3008
02382
Quick Ratio
 1.224.211.48
Current Ratio
 1.594.411.76
Interest Coverage
 3.5523,985.943.83
Quick Ratio
02018
3008
02382

Profitability

Metric
02018
3008
02382
Return on Assets (Normalized)
 2.77%10.84%3.42%
Return on Equity (Normalized)
 5.18%12.89%7.23%
Return on Invested Capital (Normalized)
 3.99%10.80%5.33%
Return on Assets
02018
3008
02382

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