AAC Technologies is a vertically integrated manufacturer of micro components
The target was raised from HK $ 52.80 to HK $ 72.80, and the company's investment rating was maintained as "Accumulate". We have raised our earnings per share for FY2019-2021 by 1.6% / 4.1% / 7.3%. Target prices are equivalent to 33.6x, 24.6x and 20.5x FY 2019-2021 P / E ratios.
The company is expected to realize a profit of CNY 2.2 billion and 3.5 billion from 2019 to 2020 and give it 28XPE in 2020, corresponding to a target market value of HK $ 99 billion and a target price of HK $ 75 .
The company's performance has gradually improved, the progress of the optical business has accelerated. Next year, it may become the most crucial year for AAC's performance recovery and optical growth.
Maintain BUY and TP of HK$68.60.Our TP of HK$68.60 is based on an unchanged 20x 2020E target PE and unchanged diluted EPS of HK$3.43.Risks include：slow smartphone shipment growth；share loss in Apple；slow hybrid lens penetration；and slow adoption of stepping motors.