"AAC Acoustic Holdings Inc." has changed to "AAC Technologies Holdings Inc."   

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2016 Interim Results

 

2016 Interim Results

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Record High First Half Revenue of RMB5,564 million, Up 18% YoY

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Strong Growth of Acoustic and Non-Acoustic segments,

Increase 24% and 23% YoY respectively

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Interim Dividend Raises from HK$0.25 to HK$0.30

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Further Customer Diversification

 

(26 August 2016, Hong Kong) AAC Technologies Holdings Inc. (“AAC Technologies” or “the Company”; Stock Code: 02018) has today announced its unaudited interim results for the six months ended 30 June 2016. AAC Technologies finished the first half of the current fiscal year with solid results and has been selected as a constituent stock in the Hang Seng Index, effective on 5 September 2016, which positions the Company among the “blue chip” companies and reaffirms market recognition of its significant position in the technology sector listed on the Stock Exchange of Hong Kong Limited.

 

2016 Interim Results Highlights (unaudited):

w Revenue hit a half year record high of RMB5,563.6 million, increased 18% year-on-year

w Upgraded acoustic solutions drove dynamic components sales growth of 24% year-on-year to contribute 61% of the sales in the first half of 2016

w Non-acoustic segment delivered 33% of total sales, up 23% year-on-year in the first half of 2016. RF Mechanical continues to gain good customer traction

w Sales revenue from Chinese customers surged 75% year-on-year, contributing over 45% of total sales. Further diversified portfolio of customers

w An interim dividend of HK$0.3 per ordinary share

(RMB Million)

1H 2016

1H 2015

YoY%

 

2Q 2016

1Q 2016

2Q 2015

QoQ%

YoY%

Revenue

5,564

4,707

+18%

 

3,019

2,545

2,402

+19%

+26%

Gross Profit

2,289

1,953

+17%

 

1,258

1,031

997

+22%

+26%

Gross Profit Margin

41.1%

41.5%

-0.4pt

 

41.7%

40.5%

41.5%

+1.2pt

+0.2pt

Net Profit

1,355

1,246

+9%

 

736

619

639

+19%

+15%

Net Profit Margin

24.4%

26.5%

-2.1pt

 

24.4%

24.3%

26.6%

+0.1pt

-2.2pt

Basic EPS (RMB)

1.10

1.01

+9%

 

0.60

0.50

0.52

+19%

+15%

Dividend (HK$)

0.30

0.25

+20%

 

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BUSINESS REVIEW 

The results in the first half of 2016 reflected the improvement in the dynamic components business since the second quarter of 2015 and continuing contribution from the non-acoustic business. The Company posted a first-half revenue and net profit of RMB5,563.6 million and RMB1,354.8 million, representing a rise of 18% and 9% year-on-year respectively. Gross margin stayed firmly above 40%. Upgraded acoustic solutions drove dynamic components sales growth of 24% year-on-year to contribute 61% of the total sales. Higher market share in dynamic components and RF Mechanical solutions led to a 75% year-on-year increase of revenue from Chinese customers to RMB2,688.6 million, accounting for over 45% of the total sales. RF Mechanical together with haptics solutions, the two distinct contributors in non-acoustic business, grew 23% year-on-year and contributed 33% of the total sales in the first half of the year. The Company continues to invest in R&D for new projects causing operating expenses increased to 14.7%. First-half net profit margin achieved was 24.4%.

 

The Board has declared an interim dividend for the first half of 2016 of HK$0.30 (30 June 2015: HK$0.25) per ordinary share, a 20% year-on-year growth. 

The Company reported the highest “Q2” sales and earnings in its history. On a quarter-on-quarter basis, the Company attained a 19% growth in both revenue and net profit, reaching RMB3,018.9 million and RMB736.1 million respectively. These strong results were mainly attributable to the growth of dynamic components and RF Mechanical sales to Chinese customers after the traditionally slow first quarter. Non-acoustic business grew 70% sequentially, contributing 38% of total sales in the second quarter of 2016. The Company sees good opportunity for further customer diversification and will continue to build a strong technology foundation for its non-acoustic segments. Q2 gross margin improved to 41.7% and effective control on operating expenses supported net profit margin improvement to 24.4%.

 

PROSPECT 

AAC Technologies started 2016 with a solid base of revenue growth even under challenging economic and business climate. As the Company enter the second half of the year, its order book is solid and the pipeline of new RF Mechanical business remains strong. It is expected to grow further in the coming quarters as the Company is in a leading position to capitalize on the mobile devices market’s accelerating demand for audio performance upgrades and increasing adoption of integrated RF Mechanical solutions. As AAC Technologies strive to gain higher market share in the non-acoustic business and maintain its pioneer position in the acoustics market, the Company will continue to bolster its R&D and develop technology platforms for miniaturized solutions in order to deliver innovative and diversified solutions for different customer requirements.

In addition, the arrival of the Internet of Things, Virtual Reality and Augmented Reality have also opened up new opportunities for the Company. These devices are designed to surround the smartphone with innovative interesting applications to facilitate interactions with the world at large. The wave of innovation in both the smartphone itself and all the surrounding devices will continue to improve and create new user experiences. The opportunity to provide hardware solutions to enable these innovations is compelling. As the devices get thinner and lighter, performance, product design and mechanical integration become essential considerations. AAC Technologies offers clients a unique perspective on how to innovate and differentiate their products. The Company is preparing to mine these opportunities, and at the same time, the Company will review such technical challenges to evaluate how its core competencies deliver sustainable growth.

AAC Technologies will continue to invest for the long term to achieve the goals of building a sustainable enterprise and helping customers grow their business at a time when they are requiring and demanding more to help them stay competitive. It is believed that by focusing on product expertise, applying innovation to design and development and continuing to build its multi-platforms business model, AAC Technologies will be the company best positioned to help customers succeed at a time when the global consumer electronics industry is searching for fresh impetus for growth.