SINGAPORE – August 26, 2025 – AAC Technologies (2018.HK) is riding high on a wave of growth, reporting a banner first half in its recently released 2025 interim results. The audio component powerhouse, headquartered here in Singapore, saw revenues surge to RMB 13.32 billion, an impressive 18.4% year-over-year increase, marking a record high for the company. Net profit leaped an even more substantial 63.1% to RMB 876 million.
Speaking to analysts, AAC Technologies CFO Guo Dan exuded confidence, projecting continued strong performance for the remainder of the year. “We anticipate revenue growth in the second half to mirror, if not exceed, the gains we’ve seen in the first,” Dan stated. He further emphasized the company’s commitment to profitability, forecasting a full-year gross profit margin exceeding the 22.1% achieved in the previous year. Dan highlighted key growth drivers, pointing to booming demand for thermal management solutions and MEMS microphones, fueled by the intensifying AI arms race. The company also expects stable, continuous growth from its automotive sector.
AAC’s secret weapon? Their proprietary Wafer Level Glass (WLG) lens technology. The company anticipates global shipments of WLG lenses to surpass 10 million units this year, with a projected 50% jump in 2026. As production scales up, this could be a game changer, with the WLG technology’s gross margin expected to exceed that of traditional plastic lenses – a potential watershed moment for AAC Technologies.
Let’s break down some key segments:
Acoustics: Sound Strategy Pays Off
While first-half gross profit margin in the acoustics business dipped slightly to 27.2%, a 2.7 percentage point decrease year-over-year, revenue still clocked in at RMB 3.52 billion, a modest 1.8% uptick. Guo Dan attributed the margin fluctuation to the introduction of numerous new product initiatives. He assured investors that operational efficiencies would kick in during the second half, driving margins back up. “We are highly confident that our annual gross margin for acoustics will remain at least as high as last year’s 30.2%,” Dan affirmed.
AAC’s acoustic innovation continues apace. Their master-level super linear speakers (SLS) and coaxial speakers continue to dominate the mid-to-high-end market, with shipments exceeding 17 million units – a near 40% year-on-year surge. The company also unveiled the industry’s thinnest speaker, measuring just 1.4mm per unit.
Optics: WLG Lenses Poised for Prime Time
The optics division is a star performer. Revenue jumped 19.7% year-over-year to RMB 2.65 billion in the first half. Gross profit margins on plastic lenses improved by over 10 percentage points, with full-year margins anticipated to exceed 30%. Riding the wave of premium smartphone upgrades, the rising tide of both volume and price suggests substantial upside for next year.
AAC’s WLG technology is generating considerable buzz, garnering orders from prominent Chinese manufacturers for their flagship devices. They’ve also secured an exclusive deal to supply WLG-based ultra-light micro-prism solutions.
“The performance advantages of WLG technology will significantly impact both customers and users,” Dan predicted. “A growth of more than 50% is almost guaranteed.”
With WLG technology yield rates now exceeding 80%, AAC has already turned a profit on WLG single lenses. Further scaling of mass production is expected to drive gross profit margins of G+P hybrid lenses to parity, or even surpass, those of plastic lenses.
AI: A Catalyst for Exponential Growth
AAC Technologies is strategically positioned to capitalize on the AI boom across multiple product lines. With AI-powered smartphones demanding richer voice interaction capabilities, the MEMS microphone business is expected to see a revenue increase of over 50% in 2025 compared to 2024.
The increased computing power of AI smartphones also translates to higher power consumption, driving demand for advanced thermal management solutions. AAC has secured orders from premium international customers and is ramping up for mass production in the second half. The company projects its heat dissipation product line to exceed RMB 1.2 billion in revenue in 2025 – more than tripling the figure from 2024.
Beyond smartphones, the trend towards ultra-thin foldable phones presents further opportunities for AAC’s high-performance, high-density components. This could potentially drive continuous growth in the average selling price (ASP) of its innovative product portfolio. Overall, AAC anticipates continued growth from its acoustics business in 2025, with double-digit growth expected from motor products.
Automotive: Accelerating Down a New Growth Curve
AAC Technologies has been actively diversifying its revenue streams, carving out a strategic presence in the automotive sector since 2021. Through strategic acquisitions, including Premium Sound Solutions (PSS) and Hebei First Light Auto Parts Co., Ltd., the company has bolstered its capabilities in system-level solutions, particularly in speakers, amplifiers, and acoustic algorithms.
By merging with these notable companies, AAC quickly entered the European, American, and Chinese automotive markets. Now, they are regarded as a tier-1 supplier for brand-new automobiles. For consumers, the future may include audio, video, and lighting systems due to the business’s expected expansion to include branded system products in addition to components.
In the first half of 2025, AAC’s automotive business generated RMB 1.74 billion in revenue, a 14.2% year-over-year increase, with a gross profit margin of 23.9%. AAC has also secured a design-win for a flagship SUV project from a prominent Chinese NEV brand, featuring an extensive sound system with 32 speakers and a 40-channel amplifier, underpinned by advanced algorithms and tuning services.
Wrapping things up, in response to queries about market concerns, Guo Dan reiterated his confidence: “Based on the current trajectory, AAC Technologies’ growth rate in the second half of the year will be no lower than that in the first, with annual revenue maintaining double-digit year-on-year growth and gross profit margin steadily improving. We will continue to actively pursue market opportunities, expand our market share, and ultimately deliver superior returns to our shareholders.”
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