Q TECH (01478) recently signaled robust profit growth through an earnings alert, though its camera module (CCM) sales trajectory appears muted. While maintaining conservative CCM revenue projections, the group benefits from margin expansion through product mix enhancements and increased profit contributions from associates. This resilience prompted CCB International to raise the company's 2025 earnings forecast by 27%, simultaneously boosting its target price 27% from HK$8.5 to HK$10.8 while keeping a "Neutral" rating.

Persistent industry price pressures overshadow Q TECH's continuous product upgrades. Projections indicate 32MP+ CCM units will constitute 55% of total shipments in H1 2025. Despite market share gains in premium smartphone segments and non-smartphone CCM expansion, overall shipments are expected to dip 3% this year before rebounding with 7% growth in 2026. Non-smartphone modules should surge 45% in 2025 followed by 22% growth in 2026. The strategic pivot toward premium offerings like optical image stabilization (OIS) and periscope modules could partially offset price erosion in conventional products.

Ongoing fierce competition continues squeezing pricing power, with this headwind likely extending through 2025. For fingerprint recognition modules (FPM), shipments are forecast to jump 31% next year and 13% in 2026, while ultrasonic FPM's share should climb to 13% and 18% respectively amid market penetration gains.