Citigroup: Downgrade Q TECH (01478) target price to HK$9, downgraded rating to "Neutral"

Citigroup released a research report stating that Q TECH (01478) met its earlier forecast for last year's performance. The bank lowered the company's earnings per share forecast for 2026 to 2027 by 39% and 33% respectively to reflect the headwinds facing the smartphone business, partially offset by the non-phone business. The target price was lowered from HK$12 to HK$9, with the rating downgraded from "buy" to "neutral". The bank mentioned that Q TECH's management guided that the shipment volume of mobile camera modules (HCM) increased by over 5% year-on-year, while the shipment volume of other camera modules (CCM) increased by over 50%. The shipment volume of optical image stabilization (OIS) may decline, but the high-end product mix of CCM will continue to rise. In addition, the company expects capital spending of 1 billion yuan this year, mainly for automotive or IoT businesses, with a portion allocated to high-end smartphones.