[ET Net News Agency, 2 January 2020] Goldman Sachs said it is seeing high market
expectations on ACC Technologies' (02018) additional revenue from the new business -
camera modules and TWS (true wireless stereo) assembly.
However, the research house believes the market may not be considering (1) Revenue
sustainability, (2) capex burden, (3) gross margin (GM), and (4) valuation de-rating.
Goldman maintained its "sell" call on AAC, with a target price of HK$35.
It sees AAC as moving down the value chain, from high GM components - acoustics (35-40%
GM), haptics (40% GM), handset lens (40-50% GM) - to low GM services: camera modules
(5-10% GM) and TWS assembly (15% GM). Goldman would turn more positive on AAC if the
company were to change the direction of its business expansion to move up the value chain.
(KL)
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02018 AAC TECH
Nominal 
23.550 -1.950 (-7.647%) Others
02/01/2020 11:19
{I-bank focus}ACC Tech (02018) seen moving down value chain
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