Moody's trims AAC Technologies

Moody's Investors Service said it downgraded AAC Technologies Holdings Inc.’s issuer and senior unsecured ratings to Baa3 from Baa2 and revised the outlook to stable from negative.

"The downgrade reflects our expectation that AAC Technologies' profitability and leverage, pressured by competition and a lower-than-expected return from its optical products business, are not likely to improve over the next 12-18 months," said Gerwin Ho, a Moody's vice president and senior credit officer, in a press release.

Even though the agency said it forecasts AAC’s revenue rising by about low single digits over the next 12-18 months as compared with that in 2022, it expects profitability over the next 12-18 months, as measured by its EBITA margin, will remain below the level of 6.6%-6.8% that the company posted in 2022.

"The stable outlook reflects AAC Technologies' market position as a leading miniature components manufacturer, with a long operating history and track record of maintaining a solid capital structure and excellent liquidity," Ho added.

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