AAC Technologies 2018

Re: AAC Technologies 2018

Postby winston » Sat May 13, 2017 8:19 am

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Apple supplier AAC posts record profits a day after short-seller attack

The component maker said its high profit margin is aided by ‘automatic production lines and economics of scale’

Net profit for the three months ended March 31 surged 72 per cent to 1.06 billion yuan, boosted by demand from Chinese clients for higher-end waterproof and stereo speakers


Source: SCMP

http://www.scmp.com/business/article/20 ... ler-attack
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Re: AAC Technologies 2018

Postby winston » Mon May 15, 2017 10:41 am

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AAC Technologies Holdings Inc
Downgrade to NEUTRAL
1Q17 results beat, but downgrade for full valuation after Apr rally

We downgrade AAC to NEUTRAL from Outperform for its full valuations after the recent share price strong rally. The stock went up 26% in Apr, for which we believe market was pricing in upside in acoustic ASPs but overlooked downside in OLED model delays.

We see the recent share price rally already reflected the iPhone8 upgrade story while it ignored the potential OLED model shipment delays.

Although we raise our OLED model acoustic ASPs and AAC's share in haptics, we see limited further upsides in revenue and margins, due to slower OLED model ramp up and GM
headwinds in RF mechanical.

Management explained its subcontractor situations in earnings call and denied the allegations
of undisclosed related parties, on which we'll keep monitoring.

AAC's NTM/current year P/Es peaked on 28 April at 21.6x/23.2x vs 19.2x/23.6x for last year's peak (on 8 Sep, 2016), and now it still trades at 19.5x/16x 2017/18E P/E vs historical NTM +1SD of 17.7x (our target multiple).

We revise 2017-19E EPS by 0%-(4)% after 1Q17 beat but lower 2H17 and GMs. New TP HK$98.4 is still based on 17.7x upcycle P/E

Source: CS
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Re: AAC Technologies 2018

Postby winston » Mon May 15, 2017 11:35 am

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<Research Report>C Suisse Downgrades AAC TECH (02018.HK) to Neutral with Target Cut to $98.4

Credit Suisse, in its report, said AAC TECH (02018.HK) went up 26% in April, for which the broker believed the market was pricing in upside in acoustic ASPs but overlooked downside in OLED model delays. Thus Credit Suisse downgraded AAC to Neutral from Outperform.

The broker saw limited further upsides in revenue and margins, due to slower OLED model ramp up and gross profit margin headwinds in RF mechanical.

The broker revised the 2017/18/19 EPS forecast by +0.1%/-1%/-3.7%, with target price cut from $99.4 to $98.4.

Source: AAStocks Financial News
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Re: AAC Technologies 2018

Postby winston » Mon May 15, 2017 11:41 am

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<Research Report>JPM Keeps AAC TECH (02018.HK) at Neutral with Target Lifted to $85

JPMorgan, in its report, said AAC TECH (02018.HK)'s 1Q revenue was in line with estimates, while gross profit margin at 41.6% was better than expected thanks to improved yield at RF mechanical.

Operating profit of RMB1.2 billion also beat JPM estimates/consensus by 12%/6%, respectively, on prudent expense control.

However, net profit of RMB1.1 billion was only in line with consensus, given the higher taxation
expense from new subsidiaries.

Judging from the negative share price reaction last Friday, the result did not appear to impress investors. 2Q guidance is also slightly better than JPM estimates/consensus, while full-year guidance is unchanged.

The broker raised its estimates to reflect the gross profit margin improvement, but expected the share price to continue its recent underperformance as explanations about its related-party transactions may leave mixed impressions on investors.

The broker stayed Neutral with target price lifted from $80 to $85.

Source: AAStocks Financial News
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Re: AAC Technologies 2018

Postby winston » Mon May 15, 2017 11:56 am

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<Research Report>BofAML: AAC TECH Quarterly Results in Line; Target Lifted to $67

Bank of America Merrill Lynch, in its report, said AAC TECH (02018.HK)'s 1Q17 results were in line with consensus.

During the conference call, management strongly denied the allegation of undisclosed connected party transactions made in a report by Gotham City Research.

AAC stressed that it follows all the regulation in terms of financial disclosure and its strong margin comes from its technology platform and automation.

According to the CEO, the alleged undisclosed AAC subsidiary mentioned in the report is an outsourcing partner, which receives some financial and operational support from AAC.

The broker's cautious view on the stock is predicated on intensifying competition in both acoustic and haptics, which could result in share loss and margin pressure; and metal casing business against the shifting trend to glass casing, which could result in industry overcapacity and margin volatility for AAC.

Bank of America Merrill Lynch saw downside risk to consensus earnings estimates in 2018 given competitive pressure and casing business risks.

The broker reiterated Underperform with target price lifted from $60 to $67.

Source: AAStocks Financial News
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Re: AAC Technologies 2018

Postby winston » Thu May 18, 2017 3:22 pm

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AAC TECH Tumbles up to 11% after Midday; Snapped by Gotham City Again

Being attacked by the short seller Gotham City again, AAC TECH (02018.HK) sank below 100MA ($86.52), tumbling 11% at most to bottom at $81.25, an over-three-month low.

The stock last stood at $84.8, down 7.4%, on soaring volume of 22.49 million shares.

Gotham City had earlier argued that AAC had used non-public connected suppliers to overstate the profits and had used these hidden entities to evade Apple's labour standards.

Today, the short seller released further report, listing some important connected persons that ACC had not disclosed.

Source: AAStocks Financial News
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Re: AAC Technologies 2018

Postby winston » Fri May 19, 2017 8:35 am

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AAC Technologies takes second hit

by Carrie Chen

Shares of AAC Technologies (2018) plunged by as much as 11 percent before being suspended yesterday, after short- seller Gotham City Research published its second report in about a week accusing the Apple Inc supplier of "dubious accounting."

The short-seller, which has a short position in AAC, yesterday cited examples of what it said were over 20 related party suppliers owned or managed by the AAC chief executive's family members or employees.

Gotham City has accused AAC of not disclosing such deals in order to overstate its profits.

Asked for comment on the Gotham City report, an AAC representative said the company was preparing a statement.

Last week, AAC chairman Koh Boon Hwee vigorously denied Gotham City's findings, saying they were inaccurate and misleading.

AAC's stock was suspended yesterday afternoon after trading as low as HK$81.25. The Hong Kong Stock Exchange did not give a reason for the suspension.

AAC's stock has fallen 26 percent since Gotham City's first report came out on May 11.

Shenzhen-based AAC produces miniaturized acoustic components, including speaker boxes, speakers, receivers and microphones. Apple is one of its main clients.

The group was founded in 1993 by current chief executive Benjamin Pan Zhengming and his wife Ingrid Wu Chunyuan, a non-executive director, who together own 40.34 percent of AAC, according to its annual report.

AAC last week posted a 72 percent profit jump to 1.06 billion yuan (HK$1.19 billion) for the first three months of the year on 66 percent revenue growth.

Earlier when the first short-sell report was published, AAC executive director Richard Mok Joe-kuen said the company's profit margin over the past 10 years was fully supported by audit reports.

Source: The Standard
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Re: AAC Technologies 2018

Postby winston » Fri May 19, 2017 11:12 am

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AAC Technologies: Apple Supplier Slammed Again by Short-Seller

By Daniel Shane

Short-sellers are hounding Apple (AAPL) supplier AAC Technologies (2018.HK) again.

During Thursday afternoon trading hours in Hong Kong, activist short-seller Gotham City published more details about allegations it had made a week prior regarding undisclosed third-party transactions.

Gotham claims that AAC, which makes smartphone speakers, used at least 20 suppliers controlled by family members of chief executive Pan Zheng Min.

This was done to offload about CNY1.5 million in order to boost margins and also to avoid Apple’s stringent labor requirements.

Gotham had criticized AAC for having “unusually high” margins compared to its peers. AAC’s shares plunged another 11% yesterday as a result.

Analysts are starting to get very nervy about the Hong Kong-based company. In a note this morning, Jefferies’ Rex Wu said that AAC needed to put up evidence to refute the allegations in order for its shares to stop bleeding:

We want clarifications on the following questions:
1) shareholder background of these companies,
2) if not connected, whether they sacrifice margin when dealing with AAC and
3) any Apple business involved.

We expect continuous pressure on the stock before seeing solid evidence.

This evidence includes details on the real identities of several individuals involved with the third-party suppliers named in the Gotham report.

Wu also points out that it makes no sense for third-party suppliers to sacrifice their own margin in order to prop up AAC’s, so this needs to be cleared up too.

Jefferies still has a price target of HKD90 on this stock, or about 9% upside from its current price.

AAC was up about 1.6% in Hong Kong trading this morning, paring some of the near 30% the shares have shed since the start of the month. The shares are still up 265% in five years.

AAC denies any wrongdoing.

Source: Barron's Asia

http://www.barrons.com/articles/aac-tec ... 1495160454
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Re: AAC Technologies 2018

Postby winston » Fri May 19, 2017 2:33 pm

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SFC 'No Comment' for AAC TECH Being Raided; to Act Immediately if Misconduct Spotted

A short seller recently issued a report regarding AAC TECH (02018.HK).

After attending a listing ceremony, Carlson Tong, Chairman of the Securities and Futures Commission (SFC), said he will not comment on individual incidents, but SFC will take immediate actions when market manipulation or irregularities were found.

It is said that after the release of the AAC short-selling report, SFC once sent a letter to brokerages, banks and licensed representatives to remind them of the consequences of violating cold shoulder orders.

Tong said SFC and market stakeholders often communicate, and notices will be issued if there are problems.

Source: AAStocks Financial News
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Re: AAC Technologies 2018

Postby winston » Mon Jun 05, 2017 9:19 am

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AAC TECH (02018.HK): Gotham Allegation is Misleading

AAC TECH (02018.HK) announced that it believed that for the allegations in the May 18 Report, Gotham had:

1. intentionally used false and incorrect information from various websites, not operated or unauthorized by the company or the suppliers of the company;

2. alleged that an entity is co-located at the same address as that of the company and further alleged that the entity was a subsidiary of the company, based solely on one piece of false website information regarding the entity, instead of verifying the entity's registered address from official public search records, which is at a completely different address, which demonstrated that Gotham was more than unprofessional and careless in creating a misleading allegation;

3. purposely erroneously used public information and invalid filings to support its allegations, which showed that Gotham was highly dubious and self-serving; and

4. created confusions of alleged related parties, while the company has already disclosed in its annual reports of such related parties transactions.

Trading in the shares of the company will remain suspended pending the release of the clarification announcement.

Source: AAStocks Financial News
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