Guoyuan International has released a research report forecasting Q TECH's (01478) revenue for 2025 to 2027 to be RMB 19.804 billion (+22.6%), RMB 21.953 billion (+10.9%), and RMB 24.477 billion (+11.5%) respectively. Net profit attributable to shareholders is projected at RMB 1.426 billion (+411%), RMB 910 million (-36.2%), and RMB 1.092 billion (+17.8%). Based on a conservative approach, the brokerage considers a valuation of 15 times 2026 P/E as reasonable, corresponding to a target price of HK$12.89 per share. This implies a potential upside of 37.2% from the current price, warranting a "Buy" rating. Key points from Guoyuan International are as follows:

Product mix upgrades coupled with gains from a share transfer are expected to drive a 400% to 450% surge in net profit for 2025. The company issued a positive profit alert, attributing the significant profit growth to three main factors: 1) Strong demand for smart vision products in non-handset segments, particularly with rapid expansion in the smart driving and IoT terminal markets, leading to a doubling in camera module sales volume and steady revenue growth; 2) Continued focus on mid-to-high-end products, with substantial increases in shipments of periscope camera modules, optical image stabilization modules, and ultrasonic fingerprint recognition modules. This optimized product structure enhances value-added benefits and improves gross margin; 3) Recognition of a transaction gain from the sale of approximately 51.08% equity in its subsidiary, Kunshan QTech Microelectron (India) Private Limited, during the year. Additionally, an associate company turned from a loss to a profit, contributing to share of profits.

The product mix for camera modules has been further optimized, leading to a significant increase in average selling price (ASP). The company continues to adhere to a product strategy focused on mid-to-high-end camera modules. By H1 2025, the proportion of smartphone camera modules with 32 megapixels and above reached approximately 53.4% of total handset modules, an increase of about 5.5 percentage points compared to H1 2024. Specifically, sales volume of periscope camera modules reached approximately 10.6 million units, a surge of about 5.9 times compared to H1 2024. The comprehensive ASP for camera module products reached approximately RMB 41.5, representing a year-on-year increase of about 27.2% and a sequential increase of about 16.1% compared to H2 2024.

Camera module business in non-handset segments has become a new growth driver. The company is actively developing its second growth curve. By H1 2025, sales volume of camera modules applied in non-handset areas such as automotive and IoT grew by approximately 47.9% year-on-year. Their share of total camera module sales volume reached about 4.2%, up 1.7 percentage points from the same period last year. Corresponding sales revenue accounted for approximately 23.9% of total camera module product revenue, an increase of about 14.3 percentage points year-on-year and an 8.5 percentage point increase sequentially from H2 2024. As of mid-2025, the company has established cooperative relationships with 7 globally leading smart driving solution providers (Tier-1) and has obtained supplier qualifications from 37 leading global automotive brands and/or new energy vehicle brands, with business collaboration gradually commencing. This represents an addition of 3 partners and 5 new designated projects since the end of 2024.