Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

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

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

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

<ul><li>Good price momentum, high level of cash sales, and high earnings quality relative to its sector</li><li>Q Tech should see a solid increase in revenue after starting to supply camera modules to Huawei in 2H17</li><li>Capacity expansion of 50% at its Kunshan plant to meet strong demand, completion this year; shipments in camera modules up by 25% YoY and fingerprint 168% in 1H17</li><li>Trades above Asian Info Tech at 17CE* 36.6x PE but offers much better earnings growth and a position</li><li>Risks: Weakening RMB againet-cashnst US$ could increase costs of raw materials, hence hurt margins</li></ul><p><em>* Consensus Estimates</em></p>

Good price momentum, high level of cash sales, and high earnings quality relative to its sectorQ Tech should see a solid increase in revenue after starting to supply camera modules to Huawei in 2H17Capacity expansion of 50% at its Kunshan plant to meet strong demand, completion this year; shipments in camera modules up by 25% YoY and fingerprint 168% in 1H17Trades above Asian Info Tech at 17CE* 36.6x PE but offers much better earnings growth and a positionRisks: Weakening RMB againet-cashnst US$ could increase costs of raw materials, hence hurt margins* Consensus Estimates

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

Q Technology Group

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