HK Stock Market Move | Q TECH (01478) fell over 5% again, with a cumulative drop of over 15% since its earnings release, as its product structure drags down profitability.

Q TECH (01478) fell more than 5% again, with a cumulative drop of over 15% since the earnings report. As of the time of publication, it was down 5.1%, priced at HKD 5.68, with a trading volume of HKD 88.0699 million. In terms of news, Q TECH achieved revenue of RMB 9.923 billion in the first half of this year, an increase of 12.36% year-on-year; net profit attributable to the parent company was RMB 276 million, a decrease of 10.49% year-on-year. CICC indicated that the decline in profit was mainly due to the stagnation in upgrading specifications of mid-to-low-end camera modules and intensified market competition. At the same time, the share of mid-to-high-end camera modules above 32MP dropped by about 7% year-on-year, resulting in a 14% year-on-year decline in the ASP of smartphone camera modules; the utilization rate of biometric module production capacity decreased; R&D expenses increased by 24% year-on-year, and the earnings of joint ventures decreased by 80% year-on-year. Citigroup's recent research report noted that Q TECH's mobile business was under pressure due to rising memory prices, but the improvement in customer structure should benefit overall business performance from winning flagship projects, outperforming the industry. Based on the company's performance and outlook for the first half of the year, they revised the profit forecast for 2026 to 2028 down by 13% to 16%, lowering the target price from HKD 9 to HKD 6.9, while maintaining a "Neutral" rating.