CITIC Securities: AAC Tech's performance last year met expectations, but due to pressure on mobile phone demand, the target price has been lowered to 47 yuan

CICC's research report pointed out that AAC Technologies (02018.HK) announced its 2025 performance, with revenue of RMB 31.817 billion, a year-on-year increase of 16%; gross margin of 22.1%, unchanged year-on-year; net profit attributable to shareholders of RMB 2.512 billion, a year-on-year increase of 40%, in line with CICC and market expectations. The rapid growth in the group's profits is mainly attributed to the high growth in thermal management: the company's thermal management revenue for 2025 is expected to be RMB 1.67 billion, with a year-on-year increase of over 400%, driving revenue from electromagnetic drive and precision structural components to grow by 21% year-on-year, and gross margin to increase by 1.2 percentage points to 24.5%. Optical profits continue to improve: benefiting from the increase in the proportion of high-end products, the optical gross margin is expected to increase by 5 percentage points year-on-year to 11.5% in 2025.

CICC expects global smartphone demand to be under pressure in 2026, thus lowering the group's net profit attributable to shareholders for this year by 6% to RMB 2.684 billion, and introducing revenue of RMB 36.9 billion and net profit attributable to shareholders of RMB 3.218 billion for 2027. The rating is maintained at "outperform the industry," but due to adjustments in profit forecasts and a downward shift in valuation center, the target price is lowered by 23% to HKD 47, corresponding to price-to-earnings ratios of 18.7 times and 15.4 times for this year and next year, respectively