Morningstar

Q Technology (Group) Co Ltd Shs Reg S 01478

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Stock XHKG Rating as of
HK$5.75 +0.56 (10.79%)
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As of Delayed Price Closed

Company Report

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Q Technology: Profitability Widens Despite Intense Competition; Raised Fair Value Estimate by 21%

Phelix Lee, Zachary Seng

Q Technology is the third-largest supplier of smartphone camera modules in China. We think continued camera specifications upgrades would drive revenue growth, but profitability should stay subdued due to intense competition in smartphone camera module assembly. The company is switching its focus from maximizing market share to improving camera module designs and competing with higher-end Android smartphone camera assemblers by working more closely with and investing in its component suppliers. However, we believe that its current positioning and modest investments and partnerships mean that it will be difficult for Q Technology to become a serious contender in the high-end assembly segment.

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Price vs Fair Value

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01478 is trading at a 555% premium.
Price
HK$5.75
Fair Value
HK$7.80
Uncertainty
Very High
1-Star Price
HK$1.49
5-Star Price
HK$2.17
Economic Moat
Jdwll
Capital Allocation
Pqcrnbsx

Bulls Say, Bears Say

Bulls

Greater integration and partnerships with suppliers of lenses and voice coil motors could drive revenue growth.

Bears

Persistent price competition in a fragmented handset camera module market could render the business unprofitable.

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Trading Information

Previous Close Price
HK$5.19
Day Range
HK$5.06–5.78
52-Week Range
HK$2.48–5.78
Bid/Ask
HK$5.74 / HK$5.75
Market Cap
HK$6.81 Bil
Volume/Avg
9.9 Mil / 6.1 Mil

Key Statistics

Price/Earnings (Normalized)
75.42
Price/Sales
0.43
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
—

Company Profile

Q Technology is engaged in the design, research and development, manufacture, and sales of camera modules and fingerprint recognition modules. It is the third-largest supplier in China and mainly supplies domestic firms. Camera modules account for most of the company’s revenue and are primarily used in smartphone cameras. Other camera modules are used in drones, virtual and augmented reality headsets, and automobiles. The company also supplies 3D modules, underglass, and capacitive fingerprint recognition modules, mainly used in smartphones. It employed 9,629 employees as of Dec. 31, 2023.
Sector
Technology
Industry
Electronic Components
Stock Style Box
Small Core
Total Number of Employees
9,396
Website
https://www.qtechsmartvision.com

Competitors

Valuation

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Metric
01478
3008
02382
Price/Earnings (Normalized)
 75.4216.4033.74
Price/Book Value
 1.28—2.60
Price/Sales
 0.436.411.68
Price/Cash Flow
 31.5312.6618.17
Price/Earnings
01478
3008
02382

Financial Strength

Metric
01478
3008
02382
Quick Ratio
 0.884.211.48
Current Ratio
 1.164.411.76
Interest Coverage
 1.0723,985.943.83
Quick Ratio
01478
3008
02382

Profitability

Metric
01478
3008
02382
Return on Assets (Normalized)
 1.28%10.84%3.42%
Return on Equity (Normalized)
 3.72%12.89%7.23%
Return on Invested Capital (Normalized)
 2.11%10.80%5.33%
Return on Assets
01478
3008
02382

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