20181109-申万宏源研究_香港_-瑞声科技-02018.HK-挑战依旧_7页_1mb

AAC Technologies Holdings (2018:HK) Summary

Core Content

AAC Technologies Holdings (2018:HK) has experienced a decline in its financial performance and market outlook for the year 2018 and beyond. The report outlines the company's current financial metrics, business segments, and analyst forecasts, emphasizing the challenges faced in key areas such as acoustics, optics, and haptics.

Main Points

Financial Performance (2016-2020E)

• Revenue:

  • 2016: 15,506.83 Rmbm
  • 2017: 21,118.57 Rmbm
  • 2018E: 19,883.46 Rmbm (down 5.85% YoY)
  • 2019E: 19,190.92 Rmbm (down 3.48% YoY)
  • 2020E: 18,563.26 Rmbm (down 3.27% YoY)

• Net Income:

  • 2016: 4,199.61 Rmbm
  • 2017: 5,325.18 Rmbm
  • 2018E: 4,086.83 Rmbm (down 23.25% YoY)
  • 2019E: 3,826.50 Rmbm (down 6.37% YoY)
  • 2020E: 3,640.59 Rmbm (down 4.86% YoY)

• EPS (Earnings Per Share):

  • 2016: 3.28 Rmb
  • 2017: 4.35 Rmb
  • 2018E: 3.34 Rmb (down 23.3% YoY)
  • 2019E: 3.13 Rmb (down 6.4% YoY)
  • 2020E: 2.98 Rmb (down 4.9% YoY)

• Valuation Ratios:

  • P/E (Price to Earnings): 15.00 (2016), 11.32 (2017), 14.72 (2018E), 15.72 (2019E), 16.52 (2020E)
  • P/B (Price to Book): 4.23 (2016), 3.43 (2017), 3.01 (2018E), 2.70 (2019E), 2.46 (2020E)

• Target Price: Revised from HK$76.00 to HK$50.00, a 10.4% decrease, corresponding to a 14x 2019E P/E.

Key Business Segments

Acoustics

• Revenue Growth: 20% YoY in 2018 due to SLS design adoption in Android phones.
• Challenges:
  • Declining shipments from major Android brands.
  • Increased competition.
  • Limited product upgrades from key clients.
• Gross Margin: Expected to remain below 40% in the near future.
• 4Q18 Outlook: Acoustics revenue is expected to contract further.

Optics

• Revenue: Rmb4.0bn in the first nine months of 2018.
• Capacity: Expected to reach 40m units per month by year-end.
• Outlook:
  • Plastic lenses are expected to continue growing with increased adoption of dual and triple camera designs.
  • Hybrid lenses are viewed with skepticism; only 4m units are expected in 2019E.
• Revenue Contribution: Less than 10% in 2019E.

Haptics

• Challenges:
  • Facing ASP (Average Selling Price), shipment volume, and margin erosion due to competition from Luxshare Precision.
  • Despite the trend toward full-screen designs, this may not offset declining revenue from major clients.
• 2019E Outlook: No significant improvement expected.

Key Information

• Market Cap (HK$ Mn): 107,964
• Shares Outstanding (Mn): 1,222
• Exchange Rate (HK$-US$): 7.80
• 52-week High/Low (HK$): 179.2/80.30
• Closing Price (HK$): 55.80
• Price Target (HK$): 50.00

Analyst's View

• Marcus Li (A0230518010004, BHK128) is the analyst.
• Rating: Underperform
• Reasoning:
  • Financial performance below expectations.
  • Challenges in acoustics, optics, and haptics segments.
  • Revisions in EPS forecasts and target price reflect the downward trend.

Disclosure and Disclaimer

• The company does not hold equities or derivatives of the target, but may provide financial advisory services.
• The report is for clients of SWS Research and not for general public.
• No compensation is provided by the listed corporation or third parties for the report.
• The report is based on public information and does not guarantee accuracy or completeness.
• The Company reserves all rights to the report and prohibits unauthorized use or distribution.

Conclusion

AAC Technologies Holdings is facing continued challenges in its core business segments. Despite some growth in the acoustics segment, the overall performance is expected to remain under pressure due to declining demand, increased competition, and limited product upgrades. The analyst maintains an Underperform rating, with a revised target price reflecting the negative outlook.