CITIC International expects Q TECH's non-mobile business to continue growing, lowering the target price to 13.18 yuan

Zhao Yin International Research Report indicates that Q TECH (01478.HK) has issued a profit warning, expecting a year-on-year profit growth of 400% to 450% last year, surpassing the bank and market expectations, mainly driven by the growth of non-mobile business, upgrades in camera modules and fingerprint modules, gains from the disposal of its Indian business, and the turnaround of its subsidiary New Giant Technology from loss to profit.

The bank expects the non-mobile business to become the main growth driver, with a compound annual growth rate of 48% in revenue from fiscal years 2025 to 2027, contributing 40% and 47% to total revenue in fiscal years 2026 and 2027, respectively, compared to 28% in fiscal year 2025.

The bank believes the current valuation of the stock is attractive and reiterates a "Buy" rating; based on the updated target price-to-earnings ratio, the target price is lowered from HKD 14.5 to HKD 13.18