20250603-招银国际-瑞声科技-02018.HK-Takeaways_from_mgmt._visit__Multiple_growth_drivers_from_optics,_automotive_and_robotics_6页_1mb

AAC Tech (2018 HK) Summary

Core Content and Business Outlook

AAC Tech is projected to experience positive revenue growth in 2025, with an estimated increase of 10-15% YoY. The company is positioned to benefit from multiple growth drivers across various segments:

• Optics (+20% YoY): Driven by upgrades in plastic lens (6P/7P) and HCM (OIS/telescope), along with WLG flagship order wins in 2H25E.
• Precision mechanics (+20% YoY): Growth from VC adoption in AI phones and hinge orders with both overseas and Chinese clients.
• Electromagnetic drive (+15-20% YoY): Haptics upgrades and robotics order wins.
• Automotive acoustics (mid-single digit YoY): Share gains with overseas OEMs and Chinese EV brands (Li, Xiaomi, Geely, etc), and expansion of the product portfolio to include speakers, microphones, and algorithms.

The company is also expected to benefit from acoustics upgrades (master-level SLS/Combo) and improved optics mix (6P+/WLG), which will support margin expansion in 2025 and 2026.

Key Growth Drivers

• Smartphone Segment: AAC holds a leading market position in acoustics, haptics, and VC components, with significant market share in flagship models for mid-frame casing, master-level SLS, x-axis haptics, and WLG lenses.
• Emerging Markets: AAC has expanded into robotics, AI glasses, and automotive markets. Notable developments include:
  • Robotics: Established product portfolio in robot actuators, with mass production and shipment to top-tier customers.
  • AI Glasses: Sole supplier of specific speakers for major Chinese brands.
  • Automotive: Acquisition of a 53.7% stake in Hebei Chuguang Auto Parts for RMB288mn, expected to enhance automotive product offerings.

Valuation and Target Price

• Target Price: HK$58.78, based on a SOTP (Sum of the Parts) valuation method.
• Valuation Multiples: Based on a weighted average P/E multiple of 25.2x for FY25E P/E.
  • Acoustics/MEMS: 25x P/E
  • PSS: 25x P/E
  • ED & PM: 25x P/E
  • Optics: 28x P/E
• Current Valuation: The stock trades at 15.8x/13.3x FY25/26E P/E, which is considered attractive given the projected 39%/18% EPS growth for FY25 and FY26.

Earnings Forecasts (RMB mn)

Revenue Mix (FY25E)

Profitability Metrics

Financial Highlights

• Current Ratio (x): Expected to rise to 2.0 in 2025, indicating improved liquidity.
• Receivable Turnover Days: Maintained at 90.0.
• Inventory Turnover Days: Improved to 75.0.
• Payable Turnover Days: Maintained at 70.0.

Key Risks and Catalysts

• Key Risks: While AAC is well-positioned, the stock is subject to market volatility, competitive pressures, and potential changes in demand for its products.
• Near-Term Catalysts:
  • Launches of aluminum and foldable phones.
  • AI glasses and auto acoustics order wins.
  • Expansion of gross margin (GPM) due to product mix improvements.

Analyst Ratings

• Rating: Maintain BUY
• Target Price: HK$58.78
• Upside/Downside: 61.3%

Share Performance

• Market Cap (HK$ mn): 43,667.1
• Avg 3 mths t/o (HK$ mn): 411.8
• 52w High/Low (HK$): 53.85 / 24.05
• Total Issued Shares (mn): 1,198.0

Shareholding Structure

Summary of Growth Drivers

• Optics: Upgrades to high-end specs and WLG order wins.
• Precision Mechanics: VC adoption in AI phones and hinge orders.
• Electromagnetic Drive: Haptics and robotics order wins.
• Automotive Acoustics: Expansion into new markets and product portfolio diversification.

Conclusion

AAC Tech is viewed positively by analysts, with multiple growth drivers and margin expansion potential. The company's diversified business model and strategic expansion into emerging markets support its 2025 revenue growth outlook. The current valuation is considered attractive, and the stock is recommended to maintain a BUY rating with a target price of HK$58.78.