AAC Technologies Holdings Inc, which was embroiled in a news report questioning the quality of its products, posted a net profit of 606 million yuan ($97.6 million) for the first quarter ended March 31, 2015 - up 25 percent from a year earlier period.

The company's shares, which took a beating in the past few weeks, surged 1.06 percent on Monday to close at HK$42.7 apiece. Revenue in the same period increased by 24 percent to 2.3 billion yuan, the company said.

In a statement, AAC said that its gross profit margin has increased by 1.3 percentage points to 41.5 percent and the non-acoustic segment continued to account for more than 35 percent of sales in the first quarter.

The research and development expenditure in the first quarter rose by 41 percent year-on-year, the company said. "The reason is that we hired more engineers and increased their salaries," said Richard Mok Joe-kuen, AAC's managing director.

"We will control the R&D (research and development) expenditure in the coming three quarters to ensure that R&D expenditure will stay between 6.5 and 7.5 percent of sales," he said.

Mok declined to comment on earlier news reports alleging that some products AAC had supplied to a customer had begun to break down over time.

"There is no need for us to respond to any individual report or individual customer," he said.

Connie Chin, AAC's head of investor relations, said her company's products "meet customers' requirements 100 percent".

AAC also announced the completion of the acquisition of WiSpry, a fabless radio frequency semiconductor company whose products are related to antenna tuning and filters for mobile devices.

"With increasing demand for better performing mobile devices, WiSpry's radio frequency products will be critical to meeting the requirements of mobile operators' performance," said Jack Duan, chief cooperative officer at AAC.

Mok stressed that the acquisition will improve its technologies for 4G and 5G products development.

"The acquisition will bring profit next year I believe," he said. "We will continue to identify and evaluate appropriate opportunities to invest in other global technology companies."

celia@chinadailyhk.com

(HK Edition 05/12/2015 page1)