DBS Raises Q TECH (01478) Target Price to HK$15, Maintains "Buy" Rating

Stock News
Aug 14

DBS has released a research report stating that Q TECH's (01478) interim results have strengthened confidence in the company's product portfolio upgrade and strategy of focusing on developing non-smartphone camera modules. The bank expects the company's second-half performance to improve compared to the first half, benefiting from a richer smartphone portfolio, continued recovery in fingerprint recognition module capacity utilization, and ongoing expansion of non-smartphone camera modules, as more automotive and Internet of Things projects enter the production phase. The bank has raised its earnings forecasts for the company by 12% and 20% for this year and next year respectively, upgrading the target price from HK$12.5 to HK$15 while maintaining a "Buy" rating. The bank believes that automotive remains the company's clearest medium-term growth driver, with the company partnering with 7 leading tier-1 suppliers and obtaining certifications from 37 automotive or new energy vehicle brands. Globally, only about 30% of vehicles are equipped with L2+ autonomous driving capabilities featuring more than 8 cameras, providing substantial growth potential for the widespread adoption of urban/mapless navigation autonomous driving. Early participation in LiDAR and expansion into embodied robotics/drone optics fields offer additional growth potential.

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