AAC Technologies (AACAY) AI Stock Analysis

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AAC Technologies

(OTC:AACAY)

Rating:78Outperform

Price Target:

$6.50

▲(15.04% Upside)

AAC Technologies demonstrates strong financial performance and positive earnings call sentiment, which are the most significant factors driving the score. Technical analysis supports a bullish outlook, although valuation concerns due to a high P/E ratio and low dividend yield slightly offset the overall positive view.

AAC Technologies (AACAY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.51B

Dividend Yield0.53%

Average Volume (3M)526.00

Price to Earnings (P/E)21.7

Beta (1Y)1.45

Revenue Growth31.23%

EPS Growth90.72%

CountryUS

Employees37,273

SectorTechnology

Sector Strength81

IndustryCommunication Equipment

Share Statistics

EPS (TTM)0.11

Shares Outstanding1,198,500,000

10 Day Avg. Volume585

30 Day Avg. Volume526

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.01

Enterprise Value/Revenue0.32

Enterprise Value/Gross Profit1.90

Enterprise Value/Ebitda2.10

Forecast

1Y Price Target

$6.50

Price Target Upside15.04% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

AAC Technologies Business Overview & Revenue Model

Company DescriptionAAC Technologies Holdings Inc., an investment holding company, provides solutions for smart devices in Mainland China, Hong Kong Special Administrative Region of the People's Republic of China, Taiwan, other Asian countries, the United States, and Europe. It operates through Acoustics Product, Electromagnetic Drives and Precision Mechanics, Optics Products, and Micro Electro-Mechanical System (MEMS) Components segments. The Acoustics Product segment provides acoustics products for smartphone and automotive, as well as wearables, tablets, and notebook markets. The Electromagnetic Drives and Precision Mechanics segment manufactures and sells haptic motors that are used in smartphones, smart watches, tablets, intelligent automobiles, smart glasses, game controllers, virtual reality/augmented reality (AR) controllers, and bone conduction headphones. This segment also offers precision mechanics comprising metal casing, bottom and parts for tablets, wearables, and notebooks products. The Optics Products segment provides plastic, front-view, surround-view, and occupant monitoring system and driver monitoring system vehicle lenses; camera modules; and voice coil motor and optical image stabilizer solutions. The MEMS Business segment offers MEMS microphone products for true wireless stereo earphones, smart speakers, tablets, and automotive markets. The company also offers research and development services; manufactures and sells tooling and precision components, electronic components, and related accessories; and provides electroplating services. AAC Technologies Holdings Inc. has a strategic partnership with Dispelix for providing AR and mixed reality solutions. The company was formerly known as AAC Acoustic Technologies Holdings Inc. and changed its name to AAC Technologies Holdings Inc. in May 2011. AAC Technologies Holdings Inc. was founded in 1993 and is headquartered in Shenzhen, the People's Republic of China.

How the Company Makes MoneyAAC Technologies generates revenue primarily through the sale of its miniaturized technology components to major consumer electronics manufacturers. Its key revenue streams include acoustic components such as speakers and receivers, electromagnetic drives used in haptics and vibrational applications, and optics products including camera lenses. The company also earns from MEMS components like microphones and sensors. A significant portion of its revenue is derived from partnerships with large smartphone manufacturers, who integrate AAC's components into their devices. AAC Technologies' emphasis on research and development, coupled with strategic partnerships, helps maintain its competitive edge and contributes to its financial performance.

AAC Technologies Earnings Call Summary

Earnings Call Date:Aug 21, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Mar 19, 2026

Earnings Call Sentiment Positive

The earnings call presented a strong overall performance with significant revenue and net profit growth driven by the optics and automotive acoustics segments. Despite some challenges with gross profit margins in the acoustics and microphone segments, the company remains confident in future improvements. The expansion of the heat dissipation business and strategic acquisitions in the automotive sector support a positive outlook.

Q2-2025 Updates

Positive Updates

Strong Revenue Growth

The Group's revenue reached CNY13.32 billion, representing a rapid YoY increase of 18.4%, driven by increased market share of key products.

Significant Net Profit Increase

Net profit increased by 63.1% YoY to CNY876 million, largely due to improved profitability in the optics business and growth in high-gross-profit businesses.

Optics Business Growth

The optics business continued its rapid growth with revenue reaching CNY2.65 billion, a YoY increase of 19.7%, and a gross profit margin improvement of 5.5 percentage points YoY.

Automotive Acoustics Performance

Automotive acoustics business generated revenue of CNY1.74 billion, a YoY increase of 14.2%, with a gross profit margin of 23.9% and strategic acquisitions enhancing capabilities.

Heat Dissipation Business Expansion

The heat dissipation segment saw revenue reach CNY221 million in the first half of the year, representing a YoY increase of over 45%, with significant investments and expected growth.

EMD and PM Business Growth

Revenue increased by 27.4% YoY to CNY4.63 billion, maintaining a gross profit margin of 22.9%, with new product innovations driving growth.

Negative Updates

Gross Profit Margin Decline in Acoustics

Gross profit margin for the acoustics segment saw a slight decline due to the ramp-up of new products, although it is expected to stabilize by year-end.

Pressure on Microphone Gross Profit Margins

While microphone revenue grew significantly, gross profit margins declined due to new product ramp-up and the lower margins of outsourced MEMS microphones.

Challenges with Initial Yields

Initial yields for new products in the acoustics segment were not high, affecting gross profit margins in the first half of the year.

Company Guidance

The 2025 Interim Results Announcement Conference for AAC Technologies provided significant guidance on the company's financial performance and strategic outlook. For the first half of 2025, the company's revenue reached CNY13.32 billion, marking an 18.4% year-over-year increase, while the gross profit was CNY2.75 billion with a gross profit margin of 20.7%. Net profit surged by 63.1% year-over-year to CNY876 million. The optics business achieved a gross profit margin improvement of 5.5 percentage points year-over-year, with a notable rise in plastic lenses' gross profit margin by over 10 percentage points. The automotive acoustics business reported a 14.2% revenue increase to CNY1.74 billion, with a gross profit margin of 23.9%. Cash inflow stood at CNY2.89 billion, reflecting a 9.1% year-over-year increase, and free cash flow was CNY1.86 billion. Capital expenditure increased by 57.5% year-over-year to CNY1.44 billion. The company expressed confidence in maintaining a high revenue growth rate of at least 18.4% in the second half of the year, with gross profit margins projected to remain stable or improve, driven by the launch of high-value products. AAC Technologies highlighted its strategic focus on expanding in the automotive sector, enhancing its optics and acoustics capabilities, and leveraging AI trends to drive future growth.

AAC Technologies Financial Statement Overview

Summary

AAC Technologies presents a solid financial performance with strong revenue and profit growth, supported by efficient operations and a stable balance sheet. The company maintains a healthy cash flow, but careful management of debt levels is crucial for sustaining financial stability.

Income Statement

Very Positive

AAC Technologies has shown strong revenue growth, with a significant increase of 33.8% from 2023 to 2024. The gross profit margin is robust at 22.1% and the net profit margin improved to 6.6% in 2024, indicating efficient cost management and profitability. The EBIT and EBITDA margins are healthy, standing at 8.4% and 20.3% respectively, showcasing operational efficiency. However, EBIT margin could be improved further to enhance profitability.

Balance Sheet

Positive

The company's balance sheet reflects a sound financial position, with a debt-to-equity ratio of 0.46, indicating moderate leverage. The return on equity (ROE) is commendable at 7.9%, suggesting effective use of shareholders' capital. The equity ratio stands at 48.7%, showing a balanced capital structure. Although the company maintains a solid equity base, the relatively high total debt requires careful monitoring to avoid financial strain.

Cash Flow

Positive

AAC Technologies demonstrates a strong cash flow position with a free cash flow of 2.9 billion in 2024, marking a recovery from previous years. The operating cash flow to net income ratio is positive, indicating good cash generation relative to profits. The free cash flow to net income ratio is 1.63, showing adequate cash coverage for net income. The company has consistently improved its cash flow generation, but continued focus on capital expenditure efficiency will be beneficial.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.42B	27.33B	20.42B	20.63B	17.67B	17.14B
Gross Profit	3.45B	6.04B	3.45B	3.78B	4.36B	4.23B
EBITDA	3.13B	5.55B	4.18B	4.25B	4.02B	3.65B
Net Income	740.37M	1.80B	740.37M	821.30M	1.32B	1.51B
Balance Sheet
Total Assets	38.91B	46.70B	38.91B	40.34B	42.02B	38.91B
Cash, Cash Equivalents and Short-Term Investments	6.83B	7.54B	6.83B	7.15B	6.05B	7.54B
Total Debt	9.58B	10.45B	9.58B	10.42B	10.50B	9.21B
Total Liabilities	16.54B	23.58B	16.54B	18.15B	19.52B	17.09B
Stockholders Equity	21.88B	22.75B	21.88B	21.66B	21.81B	21.16B
Cash Flow
Free Cash Flow	3.27B	2.93B	3.09B	2.45B	-1.17B	-656.62M
Operating Cash Flow	4.63B	5.20B	4.63B	4.37B	2.18B	3.59B
Investing Cash Flow	-1.51B	-3.49B	-1.51B	-2.35B	-4.25B	-3.26B
Financing Cash Flow	-3.17B	-1.02B	-3.17B	-1.44B	632.55M	2.58B

AAC Technologies Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5.65

Price Trends

50DMA

5.42

Positive

100DMA

5.13

Positive

200DMA

5.23

Positive

Market Momentum

MACD

0.01

Positive

RSI

51.86

Neutral

STOCH

30.26

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AACAY, the sentiment is Positive. The current price of 5.65 is below the 20-day moving average (MA) of 5.77, above the 50-day MA of 5.42, and above the 200-day MA of 5.23, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 51.86 is Neutral, neither overbought nor oversold. The STOCH value of 30.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AACAY.

AAC Technologies Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AACAY	78 Outperform	$6.51B	21.69	9.39%	0.53%	31.23%	90.72%
BDC	74 Outperform	$5.14B	23.55	18.34%	0.15%	12.93%	17.64%
PI	68 Neutral	$5.56B	27,886.11	0.42%	―	13.96%	-96.21%
EXTR	67 Neutral	$2.87B	―	-16.44%	―	2.05%	91.37%
LITE	65 Neutral	$10.45B	633.84	2.48%	―	21.03%	―
Sector *	61 Neutral	$35.56B	9.00	-10.49%	1.86%	8.45%	-8.32%
COMM	58 Neutral	$3.55B	―	17.08%	―	-11.03%	91.98%

* Technology Sector Average

Performance Comparison

AACAY

AAC Technologies

5.65

1.90

50.67%

BDC

Belden

130.31

31.30

31.61%

EXTR

Extreme Networks

21.66

8.30

62.13%

COMM

CommScope Holding

16.20

11.25

227.27%

LITE

Lumentum Holdings

149.40

98.30

192.37%

IMPINJ

200.78

21.52

12.00%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 22, 2025