AAC Technologies Holdings (SEHK:2018) Margin Improvement Reinforces Bullish Earnings Narrative

Simply Wall St.03-20

AAC Technologies Holdings (SEHK:2018) has released its FY 2025 figures with second half revenue of C¥18.5b and basic EPS of C¥1.42, set against trailing twelve month revenue of C¥31.8b and basic EPS ...

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The company has seen revenue move from C¥16.1b and basic EPS of C¥1.08 in the second half of 2024 to C¥18.5b and C¥1.42 in the second half of 2025. Over the same period, trailing net profit margin improved to 7.9% from 6.6%...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"SG9999006597.SGD":"United China-India Dynamic Growth SGD","BK1607":"新IT概念","SG9999014674.SGD":"Nikko AM All China Equity A SGD","AACAY":"瑞声科技ADR","BLSX":"Tradr 2X Long BLSH Daily ETF","BK1504":"苹果概念","BK4561":"索罗斯持仓","02018":"瑞声科技","BK1500":"做空集合股","BK4112":"金融交易所和数据","BLSG":"2倍做多BLSH ETF-Leverage Shares","BK1167":"电子制造服务","BK1608":"元宇宙概念"},"translate_title":"瑞声科技控股（SEHK：2018）利润率改善强化了看涨的盈利叙事","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AACAY":1.98,"02018":1.98,"BLSX":0.6,"BLSG":0.6},"content_text":"AAC Technologies Holdings (SEHK:2018) has released its FY 2025 figures with second half revenue of C¥18.5b and basic EPS of C¥1.42, set against trailing twelve month revenue of C¥31.8b and basic EPS of C¥2.18 that came alongside 39.8% earnings growth over the last year. The company has seen revenue move from C¥16.1b and basic EPS of C¥1.08 in the second half of 2024 to C¥18.5b and C¥1.42 in the second half of 2025. Over the same period, trailing net profit margin improved to 7.9% from 6.6%. Earnings growth of 7.9% per year over five years, together with revenue and earnings figures that were faster than market forecasts, frames the latest results as a story about how efficiently that revenue is now being converted into profit. See our full analysis for AAC Technologies Holdings. Next up is how those margins and growth rates line up with the most common stories around AAC Technologies Holdings, and where the fresh numbers either back those views or push investors to rethink them. See what the community is saying about AAC Technologies Holdings SEHK:2018 Revenue & Expenses Breakdown as at Mar 2026 AdvertisementMargins Firm Up Around 7.9% Net Level  Over the last 12 months, AAC recorded C¥31.8b in revenue and C¥2.5b in net income, which works out to a 7.9% net profit margin compared with 6.6% the prior year. What stands out for the bullish narrative is how this profitability profile lines up with its view that margins can push higher over time. The current numbers partly support that and also set a higher starting point than some assumptions.\n     Bulls talk about margins rising from 6.6% to around 10.2% in three years. However, the latest trailing margin is already 7.9%, so any further uplift would need to come on top of this rather than off a lower base. The 39.8% earnings growth over the last year fits the bullish idea of strong earnings expansion. Sustaining that pace as margins move from 7.9% toward double digits would likely require the newer areas like optics, automotive audio, and AI hardware to contribute meaningfully, not just the existing smartphone related business.    Bulls argue that AAC's faster earnings growth and margin improvement could be the early stages of a longer upgrade cycle across optics, automotive, and AI hardware, and that this is not fully appreciated in current expectations.🐂 AAC Technologies Holdings Bull Case Top line expansion and EPS trends in the last three halves  Looking at the last three reported halves, revenue moved from C¥16,081.3m in 2H 2024 to C¥13,318.5m in 1H 2025 and then C¥18,498.5m in 2H 2025, while basic EPS was C¥1.08, C¥0.76 and C¥1.42 over the same periods. Bears focus on smartphone maturity and execution risk in new segments, and these swings across halves give both sides of that argument some data to work with.\n     Critics highlight that even with 39.8% earnings growth over the last year, AAC is still very tied to smartphones, so the jump from C¥0.76 EPS in 1H 2025 to C¥1.42 in 2H 2025 might reflect product and customer cycles that are hard to repeat if handset demand levels off. At the same time, the fact that trailing revenue has risen from C¥27,328.3m to C¥31,817.0m and five year earnings growth sits at 7.9% per year gives bears less support for an immediate slowdown, which is where diversification into automotive audio, optics, and robotics becomes a key test over the next few reporting periods.    Skeptics warn that if handset volumes flatten and newer areas take longer to scale, the swings in half year EPS seen here could become more of a ceiling than a springboard for AAC.🐻 AAC Technologies Holdings Bear Case Mixed valuation signals at 13.2x P/E  The trailing P/E of 13.2x sits below the peer average of 33.2x, above the Hong Kong Electronics industry average of 11.5x, and close to a DCF fair value of about HK$32.52 versus the current share price of HK$32.22, while analysts’ overall price target of HK$55.15 is much higher than the current price. Consensus narrative leans on this kind of setup to argue that AAC screens reasonably valued while still depending on growth in newer verticals to justify multiples above the industry.\n     On one hand, the discount to peers and the share price sitting only slightly below the DCF fair value supports the idea that the market is not pricing AAC at an aggressive premium, especially given the 39.8% earnings growth and 7.9% net margin in the last year. On the other hand, the higher P/E relative to the industry average and the gap between the current price and the HK$55.15 analyst target mean that a lot rests on whether the forecast revenue growth of about 10.5% per year and earnings growth of about 12.3% per year actually play out over time.    Next Steps To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for AAC Technologies Holdings on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves. If this mix of bullish, bearish, and consensus views feels divided, treat it as a prompt to check the evidence yourself and move quickly to shape your own stance. To see what is driving current optimism, review the 3 key rewards See What Else Is Out There The recent results highlight AAC's reliance on smartphone cycles, with uneven half year EPS and revenue swings raising questions about how smooth future earnings might be. If that kind of bumpier earnings path makes you uneasy, use the 291 resilient stocks with low risk scores to focus on companies with more stable profiles and potentially steadier return patterns.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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