External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Q-Tech’s 1H25 NP growth of 168% YoY is largely in-line with profit alert backed by stronger CCM ASP (+27% YoY), non-mobile sales mix (24% in 1H25, vs 15% in 2H24) and Newmax’s earnings turnaround.</li><li>During the earnings call, mgmt. revised up FY25E shipment guidance with 1) non-mobile CCM growth of +60% YoY (from +40%) and 2) FPM growth of 30% YoY (from +20%).</li><li>Overall, we remain bullish on Q-Tech’s non-mobile upside (drone/auto/XR), and we expect Q-Tech’s India business with Dixon Group to boost CCM shipment ahead amid the US tariff uncertainties. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech’s 1H25 NP growth of 168% YoY is largely in-line with profit alert backed by stronger CCM ASP (+27% YoY), non-mobile sales mix (24% in 1H25, vs 15% in 2H24) and Newmax’s earnings turnaround.During the earnings call, mgmt. revised up FY25E shipment guidance with 1) non-mobile CCM growth of +60% YoY (from +40%) and 2) FPM growth of 30% YoY (from +20%).Overall, we remain bullish on Q-Tech’s non-mobile upside (drone/auto/XR), and we expect Q-Tech’s India business with Dixon Group to boost CCM shipment ahead amid the US tariff uncertainties. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - 1H25 Non-Mobile and GPM Beat...

<ul><li>Q-tech preannounced 1H25E net profit growth of 150-180% YoY, with mid-point of RMB305mn beating Bloomberg consensus by 20% and tracking 54% of our FY25E NP estimate.</li><li>Mgmt. attributed the results to 1) spec upgrades and a better revenue mix with mid/high-end HCM and auto/IoT CCM, 2) a better GPM on higher UTR and ASP hikes, 3) FPM’s improved product mix and shipment growth, and 4) Nexmax’s improving performance.</li><li>For 2H25E, we are positive on Q-tech’s high-end smartphone CCM demand (OIS/periscope), non-mobile CCM momentum (IoT/auto) and ultrasonic FPM upgrade cycle. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-tech preannounced 1H25E net profit growth of 150-180% YoY, with mid-point of RMB305mn beating Bloomberg consensus by 20% and tracking 54% of our FY25E NP estimate.Mgmt. attributed the results to 1) spec upgrades and a better revenue mix with mid/high-end HCM and auto/IoT CCM, 2) a better GPM on higher UTR and ASP hikes, 3) FPM’s improved product mix and shipment growth, and 4) Nexmax’s improving performance.For 2H25E, we are positive on Q-tech’s high-end smartphone CCM demand (OIS/periscope), non-mobile CCM momentum (IoT/auto) and ultrasonic FPM upgrade cycle. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - Beginning of Earnings Upward Revision Cycle; Raise TP to HK$13.21

<ul><li>We raise Q-Tech’s 12-month TP to HK$9.25 based on higher 17.7x FY25E P/E (vs 13x prior) following upbeat FY25E guidance, improving product mix with spec upgrade (OIS/periscope/ultrasonic), FPM turnaround (GPM at 9.3% in 2H) and rapid non-mobile expansion (auto/IoT).</li><li>Q-Tech’s FY24 earnings (+241% YoY) was largely in-line with prior positive profit alert, driven by CCM/FPM share gain, spec upgrade, and auto/IoT CCM ramp-up.</li><li>Looking into 2025, mgmt. remains positive on high-end CCM demand (OIS/periscope), auto/IoT CCM client/order wins and ultrasonic FPM upgrade cycle. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We raise Q-Tech’s 12-month TP to HK$9.25 based on higher 17.7x FY25E P/E (vs 13x prior) following upbeat FY25E guidance, improving product mix with spec upgrade (OIS/periscope/ultrasonic), FPM turnaround (GPM at 9.3% in 2H) and rapid non-mobile expansion (auto/IoT).Q-Tech’s FY24 earnings (+241% YoY) was largely in-line with prior positive profit alert, driven by CCM/FPM share gain, spec upgrade, and auto/IoT CCM ramp-up.Looking into 2025, mgmt. remains positive on high-end CCM demand (OIS/periscope), auto/IoT CCM client/order wins and ultrasonic FPM upgrade cycle. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - Upbeat FY25E Guidance on OIS/Periscope Upgrade and Auto/IoT Demand

<ul><li>We raised TP to HK$6.79 based on same 13x FY25E P/E, as we believe Q-tech will benefit from accelerated Android demand thanks to China national handset subsidy rollout in 1H25E.</li><li>We revised up our FY25-26E EPS forecasts by 6-12% to factor in better Android demand in FY25/26E and FY24 positive profit alert.</li><li>Looking into 2025, we are positive on China smartphone subsidy, Q-tech’s nonmobile CCM (auto/ AR&amp;VR) and ultrasound FPM biz ramp-up. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We raised TP to HK$6.79 based on same 13x FY25E P/E, as we believe Q-tech will benefit from accelerated Android demand thanks to China national handset subsidy rollout in 1H25E.We revised up our FY25-26E EPS forecasts by 6-12% to factor in better Android demand in FY25/26E and FY24 positive profit alert.Looking into 2025, we are positive on China smartphone subsidy, Q-tech’s nonmobile CCM (auto/ AR&amp;VR) and ultrasound FPM biz ramp-up. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q-Tech (1478 HK) - Beneficiary of China Smartphone Subsidies; Raise TP to HK$6.79

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Hua Hong Semiconductor / Equity Bottom-Up

<ul>
<li>Hong Kong's secular bull market continues this year with record buying from mainland investors through the Southbound Connect platform.</li>
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<a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> announced a positive profit alert of of 150% increase in profit for 2024.  The AI, phone and auto segments saw value content increases.
</li>
<li>
<a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> is well-positioned to cater to China's increasing demand for locally designed and produced chips, especially in the EV, smart home appliances and wearables industries.
</li>
</ul>


Hong Kong's secular bull market continues this year with record buying from mainland investors through the Southbound Connect platform.

AAC Technologies Holdings (2018 HK) announced a positive profit alert of of 150% increase in profit for 2024.  The AI, phone and auto segments saw value content increases.


Hua Hong Semiconductor (1347 HK) is well-positioned to cater to China's increasing demand for locally designed and produced chips, especially in the EV, smart home appliances and wearables industries.



BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

China

Q TECHNOLOGY (GROUP) Company Limited is a PRC-based camera module manufacturer focusing on mid-to-high end camera module market for Chinese branded smartphone, tablet and PC manufacturers.

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Q Technology Group (1478 HK)

Q-Tech (1478 HK) - 1H25 Non-Mobile and GPM Beat...

Q-Tech’s 1H25 NP growth of 168% YoY is largely in-line with profit alert backed by stronger CCM ASP (+27% YoY), non-mobile sales mix (24% in 1H25,...

CMB International

Q-Tech (1478 HK) - Beginning of Earnings Upward Revision Cycle; Raise TP to HK$13.21

Q-tech preannounced 1H25E net profit growth of 150-180% YoY, with mid-point of RMB305mn beating Bloomberg consensus by 20% and tracking 54% of our...

CMB International

Q-Tech (1478 HK) - Upbeat FY25E Guidance on OIS/Periscope Upgrade and Auto/IoT Demand

We raise Q-Tech’s 12-month TP to HK$9.25 based on higher 17.7x FY25E P/E (vs 13x prior) following upbeat FY25E guidance, improving product mix with...

CMB International

Q-Tech (1478 HK) - Beneficiary of China Smartphone Subsidies; Raise TP to HK$6.79

We raised TP to HK$6.79 based on same 13x FY25E P/E, as we believe Q-tech will benefit from accelerated Android demand thanks to China national...

CMB International

BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

Mainland investors are buying record amounts in HK during secular bull mkt. AAC Tech reported positive earnings surprise and Hua Hong is rapidly...

David Mudd

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