AAC Technologies Holdings (2018) AI Stock Analysis

• Market Cap: $43.93B
• Dividend Yield: 0.27%
• Average Volume (3M): 11.51M
• Price to Earnings (P/E): 22.9
• Beta (1Y): 0.83
• Revenue Growth: 31.55%
• EPS Growth: 141.88%
• Country: HK
• Employees: 37,273
• Sector: Technology
• Sector Strength: 65
• Industry: Communication Equipment
• EPS (TTM): 1.15
• Shares Outstanding: 1,198,500,000
• 10 Day Avg. Volume: 5,986,048
• 30 Day Avg. Volume: 11,508,868
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $61.02
• Price Target Upside: 65.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

AAC Technologies Holdings demonstrates strong financial performance, particularly in revenue growth and profitability. However, technical indicators show bearish trends, and the valuation does not offer significant upside potential. The lack of positive cash flow and increasing debt are notable risks.

Positive Factors

Earnings Growth

Net profit surged by 113% y/y, 8% ahead of consensus due to better-than-expected optics recovery and opex control.

Market Opportunities

Emerging opportunity in humanoid robotics. AAC Tech is set to benefit from the growing humanoid robot market, leveraging its expertise in acoustic components and precision mechanics.

Product Development

AAC's ongoing design wins and capability in various components could lead to business expansion and provide integrated solutions to customers.

Negative Factors

Market Competition

Specification upgrades for acoustics are expected to pick up pace, improving the AI assistant experience, which may intensify competition among suppliers.

Profitability Concerns

Management guided double-digit revenue growth for 2025, but achieving the targeted GPM of 22-25% remains challenging amidst high competition.

AAC Technologies Holdings Business Overview & Revenue Model

Company Description

AAC 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 Money

AAC Technologies makes money primarily through the sale of its components to major consumer electronics manufacturers. By supplying essential parts such as speakers, microphones, and haptic devices, the company capitalizes on the growth of the smartphone and wearable technology markets. Its revenue streams are heavily reliant on large contracts with leading global technology brands, and its earnings are further bolstered by its continuous investment in R&D, allowing it to innovate and maintain a competitive edge in the fast-evolving tech landscape. Strategic partnerships and collaborations with these tech giants also play a significant role in driving revenue and expanding its market reach.

AAC Technologies Holdings Financial Statement Overview

Summary

AAC Technologies Holdings shows strong revenue growth and improving profitability with a solid balance sheet. However, increasing debt levels and negative free cash flow are potential risks.

Income Statement

AAC Technologies Holdings has demonstrated strong revenue growth of 33.79% from 2023 to 2024, alongside improving profitability with a gross profit margin of 22.11% and net profit margin of 6.58% in 2024. The EBIT margin has also increased to 7.61%, indicating enhanced operational efficiency. However, the EBITDA margin has slightly decreased compared to previous years, which may suggest rising operational costs or other financial pressures.

Balance Sheet

The company maintains a healthy equity ratio of 48.71%, indicating a stable financial structure with a strong equity base. The debt-to-equity ratio stands at 0.46, reflecting manageable leverage levels. The return on equity (ROE) is moderate at 7.89%, indicating decent profitability relative to shareholder investments. However, the company's total debt has increased over the years, which could pose a risk if not managed carefully.

Cash Flow

AAC Technologies Holdings shows a concerning lack of free cash flow growth, with free cash flow turning negative in recent years despite previously positive values. The operating cash flow to net income ratio is robust at 6.25 in 2023, suggesting strong cash generation from operations relative to net earnings. However, the absence of reported cash flow data for 2024 limits a comprehensive analysis of cash flow stability and growth.

Breakdown
Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
20.42B	20.63B	17.67B	17.14B	17.88B
	Gross Profit
3.45B	3.78B	4.36B	4.23B	5.11B
	EBIT
457.10M	745.40M	1.49B	1.35B	2.47B
	EBITDA
4.18B	4.25B	4.02B	3.65B	4.52B
	Net Income Common Stockholders
740.37M	821.30M	1.32B	1.51B	2.22B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.83B	7.15B	6.05B	7.54B	5.51B
	Total Assets
38.91B	40.34B	42.02B	38.91B	34.21B
	Total Debt
9.58B	10.42B	10.50B	9.21B	8.82B
	Net Debt
2.76B	3.61B	4.45B	1.67B	3.31B
	Total Liabilities
16.54B	18.15B	19.52B	17.09B	14.85B
	Stockholders Equity
21.88B	21.66B	21.81B	21.16B	19.35B
Cash Flow		Free Cash Flow
3.09B	2.45B	-1.17B	-656.62M	1.03B
	Operating Cash Flow
4.63B	4.37B	2.18B	3.59B	3.84B
	Investing Cash Flow
-1.51B	-2.35B	-4.25B	-3.26B	-3.39B
	Financing Cash Flow
-3.17B	-1.44B	632.55M	2.58B	255.00M

AAC Technologies Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 36.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2018, the sentiment is Neutral. The current price of 36.8 is above the 20-day moving average (MA) of 35.68, below the 50-day MA of 43.88, and above the 200-day MA of 36.34, indicating a neutral trend. The MACD of -1.92 indicates Negative momentum. The RSI at 43.82 is Neutral, neither overbought nor oversold. The STOCH value of 67.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:2018.

AAC Technologies Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$10.77B	10.41	-6.71%	2.99%	7.69%	-13.12%
2018	58 Neutral	$43.93B	22.90	8.06%	0.27%	31.55%	141.88%
1478	56 Neutral	HK$8.01B	26.34	5.64%	―	26.76%	237.96%

AAC Technologies Holdings Corporate Events

AAC Technologies Announces Amendments to 2016 Share Award Scheme

AAC Technologies Holdings Inc. announced amendments to its 2016 Share Award Scheme, which is set to expire in March 2026. The amendments include removing clauses related to issuing new shares and allowing the transfer of shares held by the scheme trustee to other trustees for future share award schemes. These changes aim to improve the administration of the scheme and will not require shareholder approval.

AAC Technologies Announces 2025 AGM and Key Resolutions

AAC Technologies Holdings Inc. has announced its annual general meeting scheduled for May 22, 2025, in Hong Kong. Key resolutions include the approval of a final dividend of HK$0.24 per share, re-election of directors, and authorization for the board to manage director fees and share allotments. The meeting will also address the re-appointment of Deloitte Touche Tohmatsu as auditors, highlighting the company’s ongoing commitment to maintaining robust financial oversight and shareholder value.

AAC Technologies Completes $100M Share Buy-Back, Plans Further Repurchases

AAC Technologies Holdings Inc. has completed a US$100 million Automatic Share Buy-Back Program, repurchasing 19,676,000 shares, which accounts for 1.6417% of its total issued shares. The company has also announced a new share repurchase plan to buy back shares worth up to HK$1.2 billion over the next 12 to 18 months, reflecting confidence in its long-term business prospects and benefiting shareholders while maintaining a solid financial position.

AAC Technologies Expands Automotive Capabilities with Chuguang Acquisition

AAC Technologies Holdings Inc. has announced its acquisition of a 53.74% stake in Hebei Chuguang Auto Parts Co., Ltd., a leading Chinese manufacturer specializing in electronic component modules for automotive applications, for approximately RMB288 million. This strategic move is expected to enhance AAC’s capabilities in acoustic system solutions and accelerate Chuguang’s international market expansion by leveraging AAC’s global network.

AAC Technologies Reports Strong 2024 Financial Performance with Strategic Innovations

AAC Technologies Holdings Inc. announced a significant financial performance for the year 2024, with a 33.8% increase in revenue and a 142.7% rise in net profit. The company attributes this growth to technological innovation and operational efficiency, achieving breakthroughs in core businesses such as acoustics, optics, and precision mechanics. The acquisition of Premium Sound Solutions has further bolstered their automotive market presence. The company has also made strides in the consumer electronics sector with new product innovations and expanded its reach in the robotics market.

AAC Technologies Announces Final Dividend for 2024

AAC Technologies Holdings Inc. has announced a final cash dividend of HKD 0.24 per share for the financial year ending December 31, 2024. The ex-dividend date is set for May 26, 2025, with the payment date scheduled for June 19, 2025. This announcement reflects the company’s ongoing commitment to returning value to its shareholders and may positively impact investor sentiment.

AAC Technologies Schedules Board Meeting for Annual Results and Dividend Decision

AAC Technologies Holdings Inc. has scheduled a board meeting on March 20, 2025, to approve the audited annual results for the year ending December 31, 2024, and to consider the recommendation of a final dividend. This announcement indicates the company’s ongoing commitment to transparency and shareholder engagement, potentially impacting its financial outlook and investor relations.

AAC Technologies Forecasts Significant Profit Growth for FY2024

AAC Technologies Holdings Inc. has issued a positive profit alert, forecasting that its unaudited consolidated profit for the year ended December 31, 2024, will significantly increase by approximately 130% to 145% compared to the previous year, reaching between RMB1700 million and RMB1815 million. This growth is attributed to a recovery in the global smartphone market, improvements in product mix and operational efficiency, and benefits from an acquisition in the automotive industry, enhancing the company’s business growth potential.