AAC Technologies 2018

[winston]

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Reports that Apple Inc will launch the iPhone 6 in September buoyed related shares yesterday.

AAC Tech (2018) may be a better choice.

Its miniature acoustic components are widely used in smartphones.

Net profit for the past three years was 1 billion yuan (HK$1.24 billion), 1.7 billion yuan and 2.5 billion yuan respectively.

AAC's products are used by Xiaomi, HTC, Samsung, Lenovo, Huawei and Microsoft. And now Apple.

Orders from Apple are expected to account for 6-8 percent of AAC's sales in the second half.

Source: Dr Check, The Standard HK

[winston]

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AAC TECH (02018.HK) rated Buy, SUNNY OPTICAL (02382.HK) Neutral - G. Sachs
2014-06-23

According to the latest research report by Goldman Sachs, AAC TECH (02018.HK) +1.550 (3.150%) was rated Buy, as the bank believed the company had completed the business transformation from acoustic to non-acoustic products, which will facilitate profit recovery.


Source: AAStocks.com

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<Research Report>AAC TECH (02018.HK) reiterated Underperform on excessive expectations

Bank of America Merrill Lynch likes AAC TECH (02018.HK)'s solid results but it concerns its profit and excessive expectations of the market, including Apple's possible launch of new products in 2H2014.

The stock price should have reflected such factors.

The bank reiterated the Underperform rating with target set at $31.

The new business like non-acoustic products may have significant impact on the company's prospect of gross margin, valuation, etc.

Source: AAStocks Financial News

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<Research Report>AAC TECH (02018.HK) downgraded to Neutral, target at $50 - G Sachs

According to the latest research report by Goldman Sachs, AAC TECH (02018.HK) projected revenue in 2Q will remain stable quarterly, due to the sluggish performance of Samsung, and the 3G to 4G transition in China which affected several OEMS, such as Xiaomi.

Therefore, 2014-2016 EPS estimates of AAC TECH were lowered by 6%-7%, so as to reflect weaker sales.

Furthermore, AAC TECH was removed from the Asia Pacific Buy List, rating was downgraded from Buy to Neutral, and target price was reduced from $54 to $50.

Source: AAStocks Financial News

[winston]

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<Research Report>AAC TECH (02018.HK) upgraded to Buy, target hiked to $59 - UBS

In the latest research report, UBS upgraded AAC TECH (02018.HK) from Neutral to Buy, suggesting investors should look to the post-season.

The Bank believes that the performance of AAC in the second quarter was downbeat due to the product transition of Apple and Samsung's channel inventory adjustment.

It lowered the 2014 earning forecast by 5%, while lifting the 2015/16's by 12%/15%. The target price was lifted to $59.

Source: AAStocks Financial News

[winston]

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<Research Report>AAC TECH (02018.HK) downgraded to Hold with target lifted to $51 by Daiwa
Aug 7, 2014

According to the latest research report by Daiwa, share price of AAC TECH (02018.HK) had jumped more than 50% in last 6 months, thanks to the positive breakthrough of its non-acoustic business.

The research house projected AAC TECH will continue to benefit from the non-acoustic business in 2H, contributing 15-20% of annual revenue. However, it was believed that such favourable factor was broadly reflected by the current valuation.

Rating was downgraded from Outperform to Hold, while target price was raised from $47 to $51, representing 16x to the one-year P/E forecast. ~

AAStocks Financial News

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<Research Report>AAC TECH (02018.HK) initiated Neutral, target at $51 - C Suisse
Aug 4, 2014

Credit Suisse was positive on AAC TECH (02018.HK)'s solid leading status in technology and the business model which is under reform.

However, given the high valuation, the declining profit to ROIC (return on invested capital) and the recent rick from China's smartphone inventory adjustment, the broker initiated a Neutral rating for the stock, with target price set at $51. ~

Source: AAStocks Financial News

[winston]

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AAC TECH (02018.HK) 1H net profit down 8.9%

AAC TECH (02018.HK) -0.350 (-0.729%) Short selling $11.95M; Ratio 11.564% announced that of the interim results as of the end of June, the net profit fell 8.89% yearly to RMB980 million, representing EPS of 79.78 fen.

An interim dividend of HK25 cents was declared.

During the period, the turnover fell 2.99% yearly to RMB3.716 billion; gross profit fell 6.66% yearly to RMB1.53 billion; gross profit margin fell 1.6 ppt to 41.2%.

Source: AAStocks Financial News

[winston]

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M Stanley upgrades AAC TECH(02018.HK) to Overweight with target price $50

Morgan Stanley, in its report, stated that the recent disposal of AAC TECH(02018.HK) +2.750 (+6.901%) Short selling $43.81M; Ratio 6.845% reflects its muted growth next year, with merely 30% haptics share and a 10% decline in blended ASP.

However, possible upside could be derived from better execution to boost higher pricing for and share for Apple devices and win more projects from non-Apple clients.

The stock is trading at attractive 14.1x/11.6x FY15/16 P/E.

The broker trimmed 2015-17 EPS forecast by 8%, 11% and 12% respectively.

The rating was upgraded from Equalweight to Overweight, with a target price of $50.

Source: AAStocks Financial News

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AAC Technologies: Apple Watch Glitch Can Be Solved, Bear Jefferies Ups To Hold By Shuli Ren

Shares of AAC Technologies (2018.Hong Kong) jumped 6.4% in Hong Kong today after Jefferies, a bear, upgraded this stock to Hold.

AAC was sold off last Wednesday after The Wall Street Journal reported that its [b]components were defective, which caused delays in the delivery of Apple Watch. [/b]Apple (AAPL) reportedly has dropped AAC as a supplier.

In Jefferies analyst Ken Hui and team’s view, this glitch can be fixed. But the AAC bear said getting the Apple business back will take some time:

We believe the reliability problem with the vibrators supplied by AAC can be solved. However, even after issue is fixed, AAC will see orders flow back only slowly.

First, we believe Apple will perform rigorous testing on the vibrators produced by AAC, which will take time.

Second, since Apple has already asked Nidec to double capacity to fill the shortfall, it will unlikely shift meaningful orders back to AAC without an expansion in total Watch volume.

In longer term, consistent with guidance by Nidec. AAC can hardly reclaim to be the majority vibrator supplier for Apple Watch and new iPhones, although we believe it prices 10%+ below Nidec.

In the long-term, AAC’s business model is challenged, because its gross margin is abnormally high and it relies too much on Apple:

First, we believe the Apple Watch issue is partly due to ex-COO departure, for which the market has been underestimating negative impact on production.

Second, as AAC is losing acoustics technology leadership, the strategy of offering platform solutions does not work for all customers, because in practice AAC is effectively trying to take away the job from acoustics engineers at customers, thus facing big obstacles.

Third, management insistence on earning 40%+ overall GM will continue to hinder penetrations into new products.

Fourth, with Apple accounting for close to 70% of rev in 4Q14, customer concentration risk has gotten higher.

Jefferies has a price target of 38 Hong Kong dollars, implying 12 times their 2015 estimate. AAC Technologies is trading at HK$42.65 today.

Source: Barron's Asia