Citi Research is bearish on the upcoming interim results for AAC Technologies, a supplier to Apple, citing Sunny Optical’s earlier profit warning being worse than the market’s already weak expectations, the subsequent share price plummet, weak demand for smartphone cameras, and fierce industry competition, the bank said in a note.
Citi lowered its forecast for AAC Technologies’ earnings in the first half of the year, and expected declines for the full year of 2023. The broker said potential negative profit forecasts and revised market forecasts for smartphone contributions are negative catalysts for the month ahead.
Citi opened a 30-day negative catalyst watch on AAC, and slashed its first-half earnings forecast to 70% below that of consensus. The broker rated AAC Buy and gave it a target price of HK$22.
Apple supplier Sunny Optical tumbled more than 13% on Thursday after it warned up to 70% slump in the first half profit, which led to several banks cutting the company’s further earnings forecast and target price. Read more