HSBC: AAC Technologies' profit margin improvement speed faster than expected, raising target price by 32%

Jinshi Data News on March 3rd, HSBC Global Research issued a report pointing out that AAC Technologies (02018.HK) has a faster-than-expected improvement in profit margin, mainly due to the robust recovery of optical products, and raised the gross margin forecast for the group’s optical business in 2024-2026 to 9%, 14%, and 15%. The bank raised the group’s target price by 32% and also increased the target price by 32%, from HK$41.7 to HK$55.1. Maintain a “buy” rating. At the same time, due to the significant progress made by the group’s WLG (wafer-level glass), the bank raised the forecast for the group’s WLG shipments in 2025-2026 by 8% per year. HSBC stated that it is optimistic about the prospects of AAC Technologies in acoustics, electromagnetic drive/precision structural parts, and considering the trend of specification upgrades, raised the group’s 2024-2026 net income forecast by 13-17% to RMB 1.75 billion to 2.871 billion.