External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Q-tech announced (11 Jul) a positive 1H24 profit alert, stating 400-500% YoY net profit growth (to RMB109-130mn), which tracks 29-34% and 40-47% of our and consensus FY24E estimates.</li><li>The upbeat results were mainly driven by 1) a rising share of high-end CCM, 2) auto/IoT CCM growth, 3) rising UTR, and 4) better profitability of the associate (Newmax).</li><li>For 2H24E, we remain positive on Android flagship model launches, high-end spec upgrade, auto/IoT CCM and FPM recovery to drive profitability. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-tech announced (11 Jul) a positive 1H24 profit alert, stating 400-500% YoY net profit growth (to RMB109-130mn), which tracks 29-34% and 40-47% of our and consensus FY24E estimates.The upbeat results were mainly driven by 1) a rising share of high-end CCM, 2) auto/IoT CCM growth, 3) rising UTR, and 4) better profitability of the associate (Newmax).For 2H24E, we remain positive on Android flagship model launches, high-end spec upgrade, auto/IoT CCM and FPM recovery to drive profitability. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - Earnings Recovery Has Just Begun; Raise TP to HK$6.47

<ul><li>We hosted Q-tech at CMBI Technology Corporate Day on 26 Jun.</li><li>Key takeaways include: 1) smartphone CCM: mgmt. is positive on GPM recovery in FY24E driven by Android recovery, higher UTR and better product mix </li><li>2) non-smartphone CCM: accelerated growth in auto CCM thanks to Huawei and overseas tier-1 customers’ order wins</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We hosted Q-tech at CMBI Technology Corporate Day on 26 Jun.Key takeaways include: 1) smartphone CCM: mgmt. is positive on GPM recovery in FY24E driven by Android recovery, higher UTR and better product mix 2) non-smartphone CCM: accelerated growth in auto CCM thanks to Huawei and overseas tier-1 customers’ order winsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - ASP/GPM Upside Driven by Android Recovery and Spec Upgrade

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Sunny Optical Technology Group / Equity Bottom-Up

<ul>
<li>The Hong Kong market trades about 30% below analysts' estimated 12 month target price.</li>
<li>Analysts are raising forecasts for<a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> as it meets success with new phone rollouts and its EV business.  </li>
<li>
<a href="https://www.smartkarma.com/entities/sunny-optical-technology-group" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical Technology Group (2382 HK)</a> had a positive profit alert and <a href="https://www.smartkarma.com/entities/minth-group-ltd" target="_blank" data-smartkarma-citation="entities:9232:1" rel="noopener">Minth Group Ltd (425 HK)</a> is showing growth in its international business. Both are rated BUY from analysts.</li>
</ul>


The Hong Kong market trades about 30% below analysts' estimated 12 month target price.
Analysts are raising forecasts forXiaomi Corp (1810 HK) as it meets success with new phone rollouts and its EV business.  

Sunny Optical Technology Group (2382 HK) had a positive profit alert and Minth Group Ltd (425 HK) is showing growth in its international business. Both are rated BUY from analysts.


BUY/SELL/HOLD: Hong Kong Stock Updates (July 22)

<ul><li>We recently spoke to Q-Tech’s mgmt. and we maintain our positive view on high-end Android recovery to drive ASP/shipment upside in FY24E.</li><li>Q-tech also expected GPM improvement in 1H24E thanks to better product mix and easing competition.</li><li>For 1Q24, Q-Tech posted impressive growth of 23%/179% YoY in mobile/non-mobile CCM shipment, thanks to inventory restocking, customers’ project cycles and auto/IoT order wins.  </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We recently spoke to Q-Tech’s mgmt. and we maintain our positive view on high-end Android recovery to drive ASP/shipment upside in FY24E.Q-tech also expected GPM improvement in 1H24E thanks to better product mix and easing competition.For 1Q24, Q-Tech posted impressive growth of 23%/179% YoY in mobile/non-mobile CCM shipment, thanks to inventory restocking, customers’ project cycles and auto/IoT order wins.  Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - 1Q24 Shipment Rebound on Track; Auto & IoT as Next Growth Drivers

<ul><li>Q-Tech reported a strong Jan shipment recovery in mobile/non-mobile camera modules and fingerprint modules thanks to strong smartphone demand, highend product ramp-up and customers’ project cycle.</li><li>Following a weak 2023, we are positive that Android recovery and spec upgrade in 1H24E should drive smartphone CCM growth, and non-mobile CCM (auto/ARVR/IoT) should remain steady thanks to a customer order rebound, new product launches and mass production.</li><li>We trim FY24/25E EPS by 33/36% mainly to reflect weak FY23E earnings preannouncement (down 35-45% YoY) and mild shipment/GPM recovery in FY24/25E.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech reported a strong Jan shipment recovery in mobile/non-mobile camera modules and fingerprint modules thanks to strong smartphone demand, highend product ramp-up and customers’ project cycle.Following a weak 2023, we are positive that Android recovery and spec upgrade in 1H24E should drive smartphone CCM growth, and non-mobile CCM (auto/ARVR/IoT) should remain steady thanks to a customer order rebound, new product launches and mass production.We trim FY24/25E EPS by 33/36% mainly to reflect weak FY23E earnings preannouncement (down 35-45% YoY) and mild shipment/GPM recovery in FY24/25E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - Jan Shipment Beat; Focus on High-End Smartphone Recovery in 1H24E

China

Q TECHNOLOGY (GROUP) Company Limited is a PRC-based camera module manufacturer focusing on mid-to-high end camera module market for Chinese branded smartphone, tablet and PC manufacturers.

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Q Technology Group (1478 HK)

Q-Tech (1478 HK) - Earnings Recovery Has Just Begun; Raise TP to HK$6.47

Q-tech announced (11 Jul) a positive 1H24 profit alert, stating 400-500% YoY net profit growth (to RMB109-130mn), which tracks 29-34% and 40-47% of...

CMB International

Q-Tech (1478 HK) - ASP/GPM Upside Driven by Android Recovery and Spec Upgrade

Key takeaways include: 1) smartphone CCM: mgmt. is positive on GPM recovery in FY24E driven by Android recovery, higher UTR and better product mix

CMB International

BUY/SELL/HOLD: Hong Kong Stock Updates (July 22)

Xiaomi launches its new AI enabled phone and has success in EVs. Sunny Optical has seen its auto lens business grow and Minth is successfully...

David Mudd

Q-Tech (1478 HK) - 1Q24 Shipment Rebound on Track; Auto & IoT as Next Growth Drivers

We recently spoke to Q-Tech’s mgmt. and we maintain our positive view on high-end Android recovery to drive ASP/shipment upside in FY24E.

CMB International

Q-Tech (1478 HK) - Jan Shipment Beat; Focus on High-End Smartphone Recovery in 1H24E

We trim FY24/25E EPS by 33/36% mainly to reflect weak FY23E earnings preannouncement (down 35-45% YoY) and mild shipment/GPM recovery in FY24/25E.

CMB International

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