2Q21: Net Profit Slightly Above Estimates

AAC’s 2Q21 net profit grew 45.2% yoy to Rmb389m, beating our estimate of 40% yoy growth but 10% below consensus. The growth was supported by the stronger-than expected sales in the acoustics and optics businesses, and a significantly lower effective tax rate during the period. This is mostly offset by the surprisingly weak margins, due to a worse-than-expected low season and changes in optics product mix. We cut our 2021-22 net profit by 8%/6%, and roll over to 2022 estimates. Raise target price to HK$61.90. Maintain BUY.