Our target price for AAC is HK$45.0/share, set at c.20x 2025E P/E. Our target multiple is +1SD of 5-year historical average, supported by a 24% earnings CAGR in 2024-27E.  

Downside risks that could impede AAC stock from reaching our target price include: 1) worse-than-expected demand; 2) slower-than-expected product ramp-up; and 3) staggered margin improvement.