News Alert : AAC Optics’ listing application has been formally accepted by the Shanghai Stock exchange
- The Shanghai Stock Exchange has formally accepted the Listing Application of AAC Optics.
- The proposed initial offering size is 1.69bn shares, accounting for c.20% of the total share outstanding and the expected amount of fund raised is Rmb 8.21bn
- The potential separate listing is expected to replenish the growth capital for R&D and future development of AAC Tech.
- We expected short-term price support
What’s New
– AAC Tech (2018 HK) announced the progress of the proposed spin-off and separate listing of AAC Optics on the Shanghai Stock Exchange after market yesterday.
– The Shanghai Stock Exchange has formally accepted the Listing Application of AAC Optics.
– AAC Tech indirectly holds c.81.1% of issued share of AAC Optics before listing.
– The proposed initial offering size is 1.69bn share, accounting for c.20% of the total share outstanding. AAC Tech will hold c.65% of AAC Optics after IPO.
– The expected amount of fund raised is Rmb 8.21bn
– The proceed is planned to be spent on the R&D and production of hybrid and wafer-level glass (WLG) lens and modules.
Our View:
– We expected short-term price support due to good progress in AAC Optics A-share listing.
– The potential separate listing is expected to replenishes the growth capital for R&D and future development of AAC Tech.
– We expect a successful spin-off and listing will help realizing the value of its optical business by triggering a mean reversion in valuation to its A-share listed optical peers.
– We maintain BUY rating with TP at HK$22.3 on a strong growth expectation in the optics and MEMS segment in FY21-24F