On July 27, Morningstar released an industry research report, assigning a fair value of HK$55.00 to AAC TECH (02018), citing confidence in the stability of its core consumer electronics business and the gradual realization of new ventures in data centers and smart glasses, with the current stock price offering significant value. The report highlighted that the market has fully priced in expectations of a continued decline in smartphone shipments from 2027 to 2028 with no recovery, yet it significantly underestimates the growth potential from AAC TECH's diversified business layout, making the current stock price attractive for investment.
According to the report, the ongoing valuation pressure on AAC TECH is primarily due to its AI-related new businesses not yet generating substantial revenue. It is estimated that the company's data center business will see a volume ramp-up in 2027, with relevant products completing certification and entering trial production. If Apple launches a smart glasses product, it could also bring additional performance gains for the company. Furthermore, from a long-term perspective, after memory chip prices return to normal, Morningstar believes that the price increases for mobile phone terminals seen this year will not fully recede, especially for high-end models like Apple's and Samsung's foldable phones. These terminal price hikes create room for incorporating higher-specification components, such as thermal modules, directly benefiting AAC TECH.
Based on media and institutional research reports, AAC TECH's AI business has formed a dual-line layout of "computing power plus terminals." On the computing power side, AAC TECH has already entered the top echelon of AI liquid cooling solutions. Its core products, the 2.2MW and 2.6MW centralized liquid cooling CDUs, began mass production in the first half of the year and are being delivered globally in volume, covering core scenarios like AI data centers and high-performance computing. On the AI terminal side, multiple institutions, including UBS, point out that AAC TECH's VC (vapor chamber) technology is expected to extend to product lines such as foldable iPhones, with its thermal business projected to double in 2026 and gradually penetrate the entire iPhone, iPad, and MacBook series over the next few years. Additionally, its AI acoustic components, MEMS sensors, XR optical waveguides, and haptic actuators have been integrated into products from global leading smart terminal companies like Samsung, Meta, and Google. As the adoption of AI phones, glasses, and other terminal categories accelerates, the demand elasticity for these products continues to expand.
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