Goldman Sachs: AAC Technologies (2018.HK) - Expanding Liquid Cooling and AI/AR Opportunities
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Goldman Sachs hosted AAC Technologies at the Asia Communacopia + Technology Conference in Hong Kong on May 18-19, 2026. Discussions centered on the company's expanding liquid cooling business, emerging AI/AR glasses opportunities, and smartphone camera margin trends.
Despite near-term consumer electronics demand challenges driven by rising memory costs, management emphasized that its core acoustics, optics, and haptics businesses are successfully driving specification upgrades by focusing on premium device tiers.
AAC is actively diversifying into new growth vectors. The company has formed a strategic partnership and acquisition agreement with Yuandi Digital Technology, a private AI server liquid cooling entity, to supply components like cold plates and UQDs. This expansion serves both Chinese and overseas cloud service providers, with management anticipating further synergies to scale operations. Additionally, AAC is leveraging its global acoustics leadership to capture rising demand in AI/AR glasses, where compact designs and low power consumption are critical. The company is also developing optical waveguide solutions.
Goldman Sachs maintains a Buy rating on AAC Technologies with a 12-month target price of HK$62.5, based on 21.0x 2027E P/E. With the stock currently trading at HK$41.86, this implies 49.3% upside. Key downside risks include faster-than-expected low-margin camera module expansion, intensifying competition, and weak smartphone demand.