Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

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Offers a good discount to listed peers although short operating history is a concern

Q Tech (1478 HK): Supplying China's Smartphone Players

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

<ul><li>High earnings quality, high level of cash sales, and good price momentum relative to its sector</li><li>Large Chinese smartphone brands are expected to follow iPhone X. Q Tech has started to send out samples of its 3-D sensing camera modules</li><li>Capacity expansion of 50% at its Kunshan plant to meet strong demand, completion this year; shipments in camera modules up by 11% YoY and fingerprint modules 194% in 10M17</li><li>Trades above Asian Info Tech at 18CE* 20x PE but offers much better earnings growth and a net-cash position</li><li>Risks: Weakening RMB against US$ could increase costs of raw materials, hurt margins. Large capex spending on 3-D sensing modules</li></ul><p><em>* Consensus Estimates</em></p>

High earnings quality, high level of cash sales, and good price momentum relative to its sectorLarge Chinese smartphone brands are expected to follow iPhone X. Q Tech has started to send out samples of its 3-D sensing camera modulesCapacity expansion of 50% at its Kunshan plant to meet strong demand, completion this year; shipments in camera modules up by 11% YoY and fingerprint modules 194% in 10M17Trades above Asian Info Tech at 18CE* 20x PE but offers much better earnings growth and a net-cash positionRisks: Weakening RMB against US$ could increase costs of raw materials, hurt margins. Large capex spending on 3-D sensing modules* Consensus Estimates

Q Tech (1478 HK): Supplying China’s Big 4 with Cameras

Q Technology Group

Q Tech (1478 HK): Supplying China’s Big 4 with Cameras