AAC Technologies Holdings, the world's top supplier of miniature audio components used by Apple and major Chinese electronics brands, has posted record-high net profit and revenue for last year amid a wave of faster technology upgrades in the competitive global smartphone market.
Shenzhen-based AAC reported a 30 per cent rise in net profit last year to 4 billion yuan (US$579.9 million), up from 3.1 billion yuan in 2015, on the back of strong growth in its non-acoustic business that include antennas, optical components and so-called haptics vibrators.
Haptics refers to the technology used on smartphones, smartwatches and tablets that enable a user to feel a tactile sensation, or vibration, when interacting with an application.
Total revenue increased 32 per cent to 15.5 billion yuan from 11.7 billion yuan a year earlier, marking the company's seventh consecutive year of annual sales growth.
The figures were above projections of a 3.9 billion yuan net profit and revenue of 15 billion yuan, according to consensus market estimates from analysts polled by Bloomberg.
"These results come amid a more saturated smartphone market," AAC chairman Koh Boon Hwee said on Wednesday.
The company's share price did not reflect much investor enthusiasm, sliding 1.68 per cent to HK$85 at the mid-day break in trading on Wednesday.
Koh pointed out that more mid- to low-tier smartphone brands have moved closer to delivering comparable, but more affordable, technical specifications as those from the major global brands.
"Replacement cycles have become shorter, driven by faster technology upgrades," he said.
There were 1.4 million smartphones shipped worldwide last year, led by Samsung Electronics, Apple, Huawei Technologies, Oppo and Vivo, according to technology research firm IDC.
AAC's acoustic products include receivers, speakers and microphones, which are used on the iPhone, iPad and Apple Watch. It also has non-acoustic components, , such as antennas and the vibration components, used in those same three high-margin products.
Other customers include Samsung Electronics, Huawei Technologies, Oppo, Lenovo, Xiaomi, ZTE, Gionee, Coolpad, LeEco and Meizu.
Concerns, however, have been raised on lower-gross margins for AAC's haptics and metal casings as the company penetrates "less profitable customers", according to Huatai Reseach analyst Ken Hui.
"We continue to see a mix of positives, such as iPhone acoustics upgrade and volume improvement, and concerns like margin impact from new products at AAC," Hui said.
Copyright (c) 2017. South China Morning Post Publishers Ltd. All rights reserved.
Shenzhen-based AAC reported a 30 per cent rise in net profit last year to 4 billion yuan (US$579.9 million), up from 3.1 billion yuan in 2015, on the back of strong growth in its non-acoustic business that include antennas, optical components and so-called haptics vibrators.
Haptics refers to the technology used on smartphones, smartwatches and tablets that enable a user to feel a tactile sensation, or vibration, when interacting with an application.
Total revenue increased 32 per cent to 15.5 billion yuan from 11.7 billion yuan a year earlier, marking the company's seventh consecutive year of annual sales growth.
"These results come amid a more saturated smartphone market," AAC chairman Koh Boon Hwee said on Wednesday.
The company's share price did not reflect much investor enthusiasm, sliding 1.68 per cent to HK$85 at the mid-day break in trading on Wednesday.
Koh pointed out that more mid- to low-tier smartphone brands have moved closer to delivering comparable, but more affordable, technical specifications as those from the major global brands.
"Replacement cycles have become shorter, driven by faster technology upgrades," he said.
There were 1.4 million smartphones shipped worldwide last year, led by Samsung Electronics, Apple, Huawei Technologies, Oppo and Vivo, according to technology research firm IDC.
AAC's acoustic products include receivers, speakers and microphones, which are used on the iPhone, iPad and Apple Watch. It also has non-acoustic components, , such as antennas and the vibration components, used in those same three high-margin products.
Other customers include Samsung Electronics, Huawei Technologies, Oppo, Lenovo, Xiaomi, ZTE, Gionee, Coolpad, LeEco and Meizu.
Concerns, however, have been raised on lower-gross margins for AAC's haptics and metal casings as the company penetrates "less profitable customers", according to Huatai Reseach analyst Ken Hui.
"We continue to see a mix of positives, such as iPhone acoustics upgrade and volume improvement, and concerns like margin impact from new products at AAC," Hui said.
Copyright (c) 2017. South China Morning Post Publishers Ltd. All rights reserved.
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