AAC Technologies Holdings Inc. (02018) has released its full-year financial results for 2025. The report indicates that the Group's revenue reached a new historic high of RMB 31.82 billion, representing a year-on-year increase of 16.4%. Net profit grew by 39.8% to RMB 2.51 billion. Operating cash flow amounted to RMB 7.18 billion, up 38.1% compared to the previous year. Management emphasized during the briefing that the company has successfully transitioned from being primarily a components manufacturer focused on traditional mobile phone acoustics and haptics. Artificial Intelligence has become the core foundation driving growth across multiple product lines. Rapid growth in consumer electronics thermal management, as well as forward-looking investments in automotive smart cockpits, AR glasses, and robotics, all stem from new demands and industrial transformations brought about by AI. Looking ahead to 2026, the Group anticipates annual revenue growth will be no less than the level achieved in 2025, with gross profit margin expected to remain stable or increase from the base of 22.1%.
The following is a summary of the Q&A session from AAC TECH's results briefing:
Question: What are the main reasons for the significant improvement in the gross profit margin of the optics business, and what is the outlook for this segment? Answer: Over the past two years, the company has made substantial improvements in technology level, production efficiency, and yield rate within the optics field. In 2025, the optics business segment achieved profitability for the first time, marking a significant milestone. This segment encompasses vertical integration capabilities for plastic lenses (including unique technology routes like WLG and G+P) and modules. The overall gross profit margin for the optics business in 2025 was approximately 11.6%. Specifically, the gross profit margin for plastic lenses exceeded 30% and is projected to increase further to around 35% in 2026, positioning it at an industry-leading level. The module segment's gross margin, which was 4%-5% in 2025, is expected to grow steadily. Sales of high-end products, such as 7P and above lenses and OIS modules, nearly doubled year-on-year in 2025, reflecting the maturity of the company's technology and mass-production capabilities. Moving forward, the company will continue to explore growth opportunities in mobile phones, automotive, and non-mobile phone sectors, leveraging the leading role of its WLG technology.
Question: Looking ahead to 2026, what are the three key growth engines the company is optimistic about, and are there further M&A plans? Answer: The company's revenue growth rate was 16.4% in 2025, and growth in 2026 is expected to be no lower than this level. The main growth engines include: 1. Precision Components: Significant progress was made in 2025, with VC thermal products contributing over RMB 1 billion in revenue. This segment is expected to achieve revenue growth exceeding 30% in 2026, and the thermal business is projected to maintain high growth over the next 3-5 years. 2. Optics Business: The layout has already reached scale and is expected to maintain a favorable growth trend in the coming years. 3. Automotive Business: Following the acquisitions of PSS and PSG, the company has become a system-level solution provider with full-stack capabilities including algorithms, power amplifiers, and speakers. Revenue from automotive acoustics is expected to maintain high double-digit growth of 15%-20%, with a stable gross margin. Regarding M&A strategy, the company has acquired a 51% stake in Yuandi, aiming to establish a leading position in the liquid cooling industry. Future efforts will focus on strengthening overseas presence, potentially including establishing a factory in the United States to serve global customers and accelerate the development of the server liquid cooling business. Furthermore, the company is optimistic about the medium-to-long-term growth opportunities presented by the AI era, particularly in AR glasses (including diffractive waveguide, optical engines) and robotics.
Question: Please summarize the core reasons for the performance growth in 2025 and outline the strategic plans for each business line in 2026. What are the plans for the server liquid cooling field? Answer: The 2025 performance resulted from comprehensive breakthroughs across all product lines. For 2026, the Acoustics business is expected to maintain mid-to-high single-digit growth, with gross margin stable or increasing from the 2025 base. The Electro-magnetic Drive business is projected to achieve revenue growth of 5%-10% or higher, with a stable gross margin. The Precision Components segment targets revenue growth exceeding 30%, with continuous optimization of gross margin. The Optics business will see steady scale expansion and further gross margin improvement. The Sensor and Semiconductor business is expected to grow 15%-20%, with gross margin stable or increasing. Concerning server liquid cooling, the acquisition of Yuandi has provided a foothold in the data center infrastructure wave. Future plans involve expanding into areas like connectors, mechanical components, and cold plates. Leveraging the company's global operations and manufacturing capabilities, it aims to quickly obtain certifications from leading customers and respond to overseas demand.
Question: The thermal business achieved multi-fold growth in 2025. What were the driving forces behind this? Answer: The company's VC thermal solutions have achieved mass production at scale. While solidifying its market share domestically, the company successfully entered the supply chains of major overseas customers. Driven by demand and sales growth from these overseas clients, this segment delivered outstanding performance in 2025. In the future, the thermal business will expand from mobile phones to more end devices like laptops and tablets. The company believes this field has the potential to become a multi-billion RMB business and will be a core growth engine over the next five years.
Question: The company conducted significant share buybacks in 2025. How do you view the current secondary market valuation? Answer: Management strongly supports the buyback program. In 2025, the cumulative amount involved in share repurchases was approximately HKD 450 million. The company currently has ample cash flow; after deducting capital expenditures, the net operating cash flow in 2025 reached RMB 4.5 billion, providing solid support for M&A strategy, investments in new areas (like liquid cooling and AI), and shareholder returns. When market valuations are low, the company will continue buybacks and consider using the repurchased shares for equity incentive plans to support medium-to-long-term high growth.
Question: How should we understand the company's strategic shift from a hardware supplier to a 'Global Leader in AI Perception and Interaction Systems'? Answer: AI is reshaping various industries. Our strategy is pivoted around core technology platforms in sound, light, electro-magnetics, and precision, and we have already achieved phased results in related fields. Simultaneously, we are actively exploring and even aiming to lead in emerging frontier sectors, continuously expanding technological boundaries and application spaces. This shift is reflected in the deep strategic layout for new AI hardware. For example, in the AR glasses field, the company combines Dispelix's globally leading diffractive waveguide technology and is expanding capabilities in optical engines, significantly increasing the value per unit (estimated at USD 100-200). These initiatives are expected to yield clear mass production and shipment opportunities within the next 2-3 years, translating into significant revenue and profit contributions.
Question: What are the company's plans and progress in cutting-edge areas like humanoid robotics? Answer: Last year, the company launched a humanoid robotics solution, comprising a core product matrix including motion joints, dexterous hands, six-axis force sensors, IMUs, miniature microphone arrays, and precision components. Currently, the company is co-developing a dedicated motor project for AI hardware with a customer. Additionally, products related to dexterous hands have entered mass production and shipment, with revenue exceeding RMB 100 million within 2025. The company maintains close communication with numerous robotics companies domestically and internationally. Although the humanoid robotics market is still in its early stages with diverse developments, AAC TECH's deep expertise in acoustics, motors, optics, structural components, and motors aligns well with its requirements. Through BU-style management, the company is broadly engaging with customers and actively seeking commercial deployment opportunities. Once the industry form matures, the company is poised to become a significant player in this field.
Question: How is the company translating its AI industry layout into tangible commercial opportunities and financial performance? Answer: Related points have been mentioned previously. Through years of transformation and external technological advancements, AI has genuinely become the foundation driving growth across our multiple product lines, delivering direct contributions to our performance. For instance, as mentioned earlier, the rapid growth in our consumer electronics thermal business is primarily driven by AI demand. For example, the computational demands of AI algorithms increase reliance on high-performance VC thermal solutions; the need for AI voice interaction has driven significant growth in our sensor and semiconductor business. Furthermore, AI is catalyzing the emergence of multi-form-factor devices (like glasses, robots), creating broader growth space for integrated service providers in the fields of sound, light, and electronics.
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