Core Viewpoint - AAC reported in-line results for 1H25, with revenue and net profit attributable to shareholders reaching RMB13,318 million and RMB876 million, representing year-on-year increases of 18.4% and 63.1% respectively, accounting for 43% and 36% of FY25E consensus estimates [1] Financial Performance - Revenue and net profit for 1H25 were RMB13,318 million and RMB876 million, reflecting increases of 18.4% and 63.1% year-on-year [1] - Blended gross margin (GM) for 1H25 was above 20% but decreased by 0.8 percentage points year-on-year and 1.9 percentage points half-on-half to 20.7%, falling short of FY25E Bloomberg consensus of 23.3% [1] - Management expects 2H25 revenue growth to be similar to 1H25, with improvements in GM as new products begin mass production [1] Segment Performance Acoustics - Acoustics segment, accounting for approximately 26% of revenue, saw stable sales growth of 1.8% year-on-year to RMB3,523 million, with GM down 2.7 percentage points year-on-year to 27.2% [1] - High-end Android demand and new products are expected to drive average selling price (ASP) increases, supporting GM to remain above 30% [1] Automotive & Consumer Acoustics (PSS) - PSS revenue was RMB1.7 billion, up 14.2% year-on-year, with GM at 23.9% [3] - AAC holds an estimated 15-20% market share in the global automotive speaker market, with expectations for margin expansion through improved efficiency [4] Optics - Optics revenue grew 19.7% year-on-year to RMB2,647 million, with GM expanding by 5.5 percentage points year-on-year to 10.2% [5] - The segment's profitability is expected to improve in 2H25 and FY26E due to better industry dynamics and product mix [8] EM + Precision Mechanics - Revenue for this segment grew 27.4% year-on-year to RMB4,633 million, with GM stable at 22.9% [9] - Heat dissipation products revenue grew over 45% year-on-year, with expectations to reach RMB1 billion by the end of 2025 [10] Earnings Forecast - AAC revised FY25E/26E earnings forecasts upward by 20.5%/20.4% due to higher sales forecasts and GM expansion across core business segments [10] - The company expects sales and net profit to grow at CAGRs of 11.7% and 22.3% from FY24-27E respectively [10]