"Big Banks" Citigroup: Q TECH's net profit last year was below the bank's expectations, and non-mobile business is expected to continue driving strong growth

Citi stated that Q TECH (01478.HK) released a profit warning after the market closed yesterday (13th), expecting last year's net profit to increase by 4 to 4.5 times year-on-year, reaching RMB 1.395 billion to 1.535 billion, which is 12% lower than the bank's expectation of RMB 1.663 billion but higher than market expectations. The strong growth comes from the accelerated growth of non-mobile CCM lens modules in areas such as the Internet of Things and automotive, focusing on mid-to-high-end CCM lens modules and fingerprint modules to drive better product mix and gross margin, as well as the sale of a 51.08% stake in Q TECH India and improvements in joint venture operations.

The bank indicated that its recent assessment of Q TECH reflects expectations of weakness in the smartphone market over the next two years, but believes that non-mobile business will continue to drive strong growth. The bank currently gives Q TECH a "Buy" rating and a target price of HKD 12