[ET Net News Agency, 5 February 2018] Goldman Sachs lifted its target price for AAC
Technologies (02018) to HK$198 from HK$97, and upgraded its rating to "buy" (on conviction
list) from "neutral".
The research house said Smartphone industry shipment growth has decelerated from double
digits (40% CAGR in 2007-2015) to mid-single digits since 2016 as the market has matured.
However, AAC has been able to grow sales/earnings by >30% in the last two years from
higher content, due to technology upgrades, despite lower industry growth.
Moving forward, Goldman believes AAC will continue to grow at a similar pace via
exposure to multiple secular trends, on acoustic upgrade, camera upgrade, wireless
charging and 5G.
In the near term, we expects AAC's core business to benefit from Android smartphones
adding stereo sound and waterproofing while expanding new businesses in lens and RF casing
(3D glass, metal frame, haptics). It believes consensus is underestimating adoption of
AAC's hybrid lens and RF casing in outer years. (KL)