AAC Technologies Holdings (2018) AI Stock Analysis

• Market Cap: $46.12B
• Dividend Yield: 0.62%
• Average Volume (3M): 7.19M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.86
• Revenue Growth: 30.73%
• EPS Growth: 90.08%
• Country: HK
• Employees: 37,273
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.84
• Shares Outstanding: 1,198,500,000
• 10 Day Avg. Volume: 6,141,854
• 30 Day Avg. Volume: 7,188,178
• PEG Ratio: 0.14
• Price to Book (P/B): 1.82
• Price to Sales (P/S): 1.51
• P/FCF Ratio: 14.10
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 2.26
• Enterprise Value/Gross Profit: 10.28
• Enterprise Value/Ebitda: 13.59
• 1Y Price Target: $61.32
• Price Target Upside: 59.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: HK$44.00 ▲(14.29% Upside)

AAC Technologies Holdings' strong financial performance and positive earnings call outlook are offset by bearish technical indicators and moderate valuation. The company's growth potential is promising, but rising debt and cash flow concerns warrant caution.

Positive Factors

Revenue Growth

AAC Technologies' strong revenue growth indicates robust demand and successful market penetration, particularly in key product lines, which supports long-term business expansion.

Optics Business Profitability

The improved profitability in the optics business reflects AAC's competitive edge in high-demand segments, enhancing its earnings potential and market position.

Strategic Expansion

Strategic acquisitions bolster AAC's capabilities in automotive and optics, positioning it for sustained growth in emerging high-value markets.

Negative Factors

Rising Debt Levels

Increasing debt levels may strain AAC's financial flexibility, potentially impacting its ability to invest in growth opportunities and manage economic downturns.

Negative Free Cash Flow

Negative free cash flow could limit AAC's ability to fund operations and strategic initiatives, posing a risk to its long-term financial health and growth prospects.

Gross Profit Margin Pressure

Pressure on gross profit margins suggests potential challenges in maintaining cost efficiency, which could affect AAC's profitability if not addressed.

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 generates revenue primarily through the sale of its acoustic and optical components to major consumer electronics manufacturers. The company's revenue model is heavily reliant on contracts and partnerships with leading smartphone and electronics brands, which account for a significant portion of its sales. Key revenue streams include the sale of miniature speakers and microphones, which are integral to mobile devices, as well as haptic feedback technologies that enhance user interaction. Additionally, AAC has expanded its offerings to include optical components for cameras in smartphones, capitalizing on the growing demand for high-quality imaging. Strategic partnerships with major manufacturers, continuous innovation in product development, and a focus on high-volume production capabilities contribute to its earnings, enabling the company to maintain a competitive edge in the rapidly evolving technology market.

AAC Technologies Holdings Financial Statement Overview

Summary

AAC Technologies Holdings shows strong revenue growth and improving profitability, with a stable financial structure. However, increasing debt levels and negative free cash flow present 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.74B	27.33B	20.42B	20.63B	17.67B	17.14B
Gross Profit	5.00B	6.04B	3.45B	3.78B	4.36B	4.23B
EBITDA	3.78B	4.75B	4.18B	4.25B	4.02B	3.65B
Net Income	1.70B	1.80B	740.37M	821.30M	1.32B	1.51B
Balance Sheet
Total Assets	47.03B	46.70B	38.91B	40.34B	42.02B	38.91B
Cash, Cash Equivalents and Short-Term Investments	7.76B	7.54B	6.83B	7.15B	6.05B	7.54B
Total Debt	11.12B	10.46B	9.58B	10.42B	10.50B	9.21B
Total Liabilities	23.27B	23.58B	16.54B	18.15B	19.52B	17.09B
Stockholders Equity	23.29B	22.75B	21.88B	21.66B	21.81B	21.16B
Cash Flow
Free Cash Flow	708.67M	2.93B	3.09B	2.45B	-1.17B	-656.62M
Operating Cash Flow	1.28B	5.20B	4.63B	4.37B	2.18B	3.59B
Investing Cash Flow	-520.52M	-3.49B	-1.51B	-2.35B	-4.25B	-3.26B
Financing Cash Flow	-877.30M	-1.02B	-3.17B	-1.44B	632.55M	2.58B

AAC Technologies Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 38.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 38.5 is above the 20-day moving average (MA) of 38.28, below the 50-day MA of 40.06, and below the 200-day MA of 41.63, indicating a neutral trend. The MACD of -0.37 indicates Negative momentum. The RSI at 48.19 is Neutral, neither overbought nor oversold. The STOCH value of 50.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2018.

AAC Technologies Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0303	79 Outperform	$15.96B	14.20	23.17%	7.60%	-0.99%	-10.43%
0763	68 Neutral	$192.19B	22.00	7.73%	2.11%	5.14%	-38.37%
2018	63 Neutral	$46.12B	19.76	9.39%	0.62%	30.73%	90.08%
6869	62 Neutral	HK$53.28B	46.22	4.79%	0.70%	14.38%	-41.96%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
2038	56 Neutral	$14.19B	110.67	1.16%	―	3.21%	―
2342	46 Neutral	$8.76B	―	-10.70%	0.23%	-13.99%	-32.74%

AAC Technologies Holdings Corporate Events

AAC Technologies Updates Nomination Committee Structure

AAC Technologies Holdings Inc. announced changes in the composition of its Nomination Committee, effective from October 1, 2025. Ms. Wu Ingrid Chun Yuan has been appointed as a member, while Mr. Kwok Lam Kwong Larry has stepped down. These changes align with amendments to the Listing Rules and Corporate Governance Code, impacting the company’s governance structure.

AAC Technologies Announces Board Composition and Committee Roles

AAC Technologies Holdings Inc. has announced the composition of its board of directors, including executive, non-executive, and independent non-executive directors. The announcement also details the membership of various board committees, such as the Audit and Risk Committee, Remuneration Committee, Nomination Committee, and Sustainability Committee. This update provides stakeholders with clarity on the governance structure and leadership roles within the company, which may influence its strategic direction and operational decisions.