On August 21, AAC TECH (02018) released its 2025 interim results report in Singapore, with the group's first-half revenue reaching RMB 13.32 billion, up 18.4% year-on-year, hitting a new record high. Net profit surged significantly by 63.1% year-on-year to RMB 876 million. AAC TECH CFO Guo Dan stated in an interview that the company's revenue growth in the second half will continue to maintain a high level year-on-year, expected to be no less than the first half's 18.4%, and the full-year gross margin level will be no less than last year's 22.1%. Under the AI upgrade trend, multiple businesses including cooling and MEMS microphones will achieve double growth, while automotive revenue and gross margin will realize stable improvement. Additionally, the globally exclusive WLG lens shipments will exceed 10 million units this year, with an expected 50% growth next year. As production scale increases in the future, gross margin is expected to exceed that of plastic lenses, achieving a milestone breakthrough.

Full-Year Acoustics Gross Margin Not Lower Than Last Year's 30.2% Level

Financial reports show that AAC TECH's acoustics business gross margin was 27.2% in the first half of this year, down 2.7 percentage points year-on-year, with revenue of RMB 3.52 billion, up 1.8% year-on-year. Guo Dan explained that as one of the company's traditional core businesses, the slight fluctuation in acoustics gross margin was mainly due to the introduction of numerous new product projects in the first half. As operational efficiency gradually improves in the second half and products enter large-scale production, acoustics gross margin will steadily improve, with the company's full-year acoustics gross margin maintaining no less than last year's full-year level of 30.2%.

In the first half of 2025, AAC TECH launched a series of innovative acoustic products, with SLS Master Class and coaxial speakers continuing to lead the mid-to-high-end market, shipping over 17 million units in the first half, up nearly 40% year-on-year. The company introduced the industry's first Master Class coaxial symmetric dual speakers and the industry's thinnest speaker with a single unit thickness of only 1.4MM.

WLG Achieves Milestone Breakthrough

In the first half of 2025, AAC TECH's optics business maintained rapid growth momentum with revenue of RMB 2.65 billion, up 19.7% year-on-year. Plastic lens gross margin improved by more than 10 percentage points, with full-year gross margin expected to exceed 30% this year. With volume and price increases driven by smartphone premium upgrades, there will be further upward space next year.

AAC TECH's proprietary WLG technology performed excellently and received positive market feedback. In the first half, the company secured 1G6P lens orders for flagship models from multiple leading domestic customers and exclusively supplied WLG ultra-light prism solutions. According to Guo Dan, AAC TECH's full-year WLG lens shipments will exceed 10 million units this year, with expected growth of over 50% next year. "The unique performance advantages of WLG technology will bring profound changes to both customers and user experience, with over 50% growth being certain."

Currently, WLG technology yield rate has reached over 80%, achieving profitability for single WLG lenses. As production scale further increases in the future, the gross margin of G+P glass-plastic hybrid lenses is expected to reach or even exceed the level of plastic lenses.

AI Will Drive Multiple Businesses to Double Growth

AAC TECH will significantly benefit from AI industry development, with multiple business segments achieving rapid growth. Guo Dan stated that due to AI smartphones' higher demands for voice interaction functions, the MEMS microphone business will be the first to benefit, with 2025 revenue expected to increase by over 50% compared to 2024. Additionally, due to AI smartphones' higher computing power and greater power consumption, demand for cooling performance is increasingly high, directly driving rapid growth in AAC TECH's cooling business. According to Guo Dan, AAC TECH has secured orders from overseas high-end customers, with mass production expected to proceed smoothly in the second half. The overall revenue scale of the cooling product line in 2025 will exceed RMB 1.2 billion, at least tripling compared to 2024.

Furthermore, the ultra-thin development trend of foldable phones will bring more market opportunities for AAC TECH's high-performance, high-density products, expected to drive continuous ASP improvements for its innovative products, core components, and modules. Full-year 2025 acoustics business revenue is expected to continue growing, with motor product business revenue achieving double-digit growth.

Regarding the application of iPhone side key modules, Guo Dan stated it's inconvenient to comment on specific customers. Speaking only about their own products, AAC TECH's key module products began shipping at the end of last year, and the functionality of these products will have further iterations and evolution in the future, with the company capable of providing support to domestic and overseas customers.

Automotive Revenue and Gross Margin Will Achieve Stable Growth

In recent years, AAC TECH has actively developed its second growth curve. The company began entering the automotive field in 2021, continuously improving its automotive business layout through acquisitions of PSS and Chuguang Automotive, and now possesses system-level solution capabilities including speakers, algorithms, and amplifiers.

According to Guo Dan, AAC TECH has rapidly integrated into leading European, American, and Chinese new energy OEMs through acquisitions, becoming a TIER1 supplier. PSS has secured good designation projects from overseas customers, especially mainstream European customers, with both revenue and gross margin achieving stable growth. Automotive acoustics business revenue now accounts for over 13% of total group revenue.

In the future, the automotive business will expand from components to branded system products and is expected to become a diversified solution provider integrating sound, light, and electrical systems. Financial data shows that AAC TECH's automotive business revenue in the first half of 2025 was RMB 1.74 billion, up 14.2% year-on-year, with gross margin reaching 23.9%. The company has been designated for a flagship SUV project of a domestic new energy brand, including 32 speakers, 40-channel amplifiers, algorithms, and tuning services.

In the interview, Guo Dan also provided summary responses to hot issues of market concern. She stated that from the current situation, AAC TECH's growth rate in the second half will be no less than the first half, with full-year revenue scale maintaining double-digit growth year-on-year and gross margin steadily improving. Additionally, while achieving business growth, the company has controlled R&D, sales, and management expenses at good levels, which is the result of the company's transformation in recent years. The company will actively seize market opportunities, expand market share, achieve steady performance growth, and continue to bring better returns to shareholders, sharing in the company's development results.