Country Garden International: Gives Q TECH (01478) a "buy" rating with a target price of 12.89 Hong Kong dollars.

Guoyuan International released a research report predicting that Q TECH (01478) will have revenues of RMB 19.804 billion (+22.6%), RMB 21.953 billion (+10.9%), and RMB 24.477 billion (+11.5%) in 2025 to 2027, respectively. The net profit attributable to shareholders will be RMB 1.426 billion (+411%), RMB 0.91 billion (-36.2%), and RMB 1.092 billion (+17.8%), respectively. According to the principle of prudence, the bank believes that a 15x PE valuation in 2026 is reasonable, with a corresponding target price of HKD 12.89 per share, representing a 37.2% upside from the current price, and a "buy" rating is given. Guoyuan International's main points are as follows: Product structure transformation and equity transfer benefits, net profit expected to increase by 400% to 450% in 2025 The company announced a profit announcement, stating that the significant increase in net profit in 2025 is driven by three factors: 1) strong demand for intelligent visual products in non-mobile phone sectors, especially the rapid expansion of the intelligent driving and IoT terminal markets, leading to a doubling of camera module sales volume, and steady growth in revenue; 2) the company continues to focus on mid-to-high-end products, with shipments of periscope cameras, optical image stabilization modules, and ultrasonic fingerprint recognition modules increasing significantly, optimizing product structure to enhance value-added, improving gross profit margin; 3) the completion of the sale of 51.08% equity in its subsidiary Kunshan QTech Microelectronics (India) Private Limited this year, recording trading gains, and the operating performance of affiliated companies turning from loss to profit, bringing in attributable income. Further optimization of camera module product structure, significant increase in unit price The company continues to adhere to a product strategy focused on mid-to-high-end camera modules. as of H1 2025, the proportion of camera modules for phones with 32 million pixels and above reached approximately 53.4% of all phone modules, an increase of about 5.5 percentage points from H1 2024. Among these, the sales of periscope camera modules were around 10.6 million units, an increase of about 5.9 times from H1 2024. The comprehensive average unit price of camera module products reached about RMB 41.5, an increase of approximately 27.2% compared to the previous year, and about 16.1% compared to H2 2024. Non-mobile phone sector camera module business becomes a new growth driver The company is focusing on developing its second growth curve. as of H1 2025, sales of camera modules for non-mobile phone sectors such as automotive and IoT increased by about 47.9% year-on-year, accounting for approximately 4.2% of total camera module sales, an increase of 1.7 percentage points from the same period. The corresponding sales revenue accounted for about 23.9% of total camera module sales revenue, an increase of about 14.3 percentage points from the same period, and about 8.5 percentage points compared to H2 2024. By the mid of 2025, the company has established partnerships with 7 leading global intelligent driving solution providers (Tier-1), and has gained supplier qualification certification for 37 global leading automotive brands and/or new energy vehicle brands and gradually started business cooperation, adding 3 new partners and 5 new designated projects compared to the end of 2024.