Q-tech preannounced 1H25E net profit growth of 150-180% YoY, with mid-point of RMB305mn beating Bloomberg consensus by 20% and tracking 54% of our FY25E NP estimate. Mgmt. attributed the results to 1) spec upgrades and a better revenue mix with mid/high-end HCM and auto/IoT CCM, 2) a better GPM on higher UTR and ASP hikes, 3) FPM’s improved product mix and shipment growth, and 4) Nexmax’s improving performance. For 2H25E, we are positive on Q-tech’s high-end smartphone CCM demand (OIS/periscope), non-mobile CCM momentum (IoT/auto) and ultrasonic FPM upgrade cycle. We raise FY25- 27E EPS by 21-30% to reflect the strong 1H25 and better margin outlook in FY26/27E, and our FY25-27E EPS are 14-19% above consensus. Our new TP of HK$13.21 is based on a higher 19.5x FY25E P/E (vs 17.7x prior), in-line with 10-year hist. avg. forward P/E, given the sector re-rating and stronger outlook in FY26-27E. Catalysts include 3Q product launches, auto/IoT CCM client wins, and FPM margin expansion.
　　1H25 earnings beat consensus by 20%. Q-tech announced 1H25E net profit growth of 150-180% YoY to RMB288-322mn. NP mid-point at RMB305mn beats consensus by 20%, tracking 54% of our FY25E NP estimate. For 1H25, we estimate revenue/NP growth of 7%/162% YoY, driven by 2% YoY in CCM (non-mobile up 97%) and 100% YoY in FPM (ultrasonic up 20x), while GPM improved to 7.1% in 1H25 (vs 5.2%/6.9% in 1H24/2H24), thanks to HCM spec upgrades, higher-margin non-mobile CCM and ultrasonic FPM shipments.
　　2H25 outlook: high-end OIS/periscope, IoT/auto CCM, GPM recovery. We expect Q-tech business to see continued strong momentum into 2H25E, driven by high-end HCM upgrade (OIS/periscope: 23% mix in 2H, vs 18% in 1H), IoT/auto momentum (revenue +85% in 2H, vs +97% in 1H), and FPM spec upgrades (+15% YoY in 2H). We estimate revenue/NP to grow 25%/162% YoY in 2H25E.
　　Our FY25-27E EPS are 14-19% above consensus; Reiterate BUY. We believe Q-tech is well-positioned to capture high-end smartphone camera upgrade demand and business momentum in IoT/auto CCM modules. We lift FY25-27E EPS by 21-30% to reflect the strong 1H25 and better GPM with improved mix in FY26/27E. Our new TP of HK$13.21 is based on higher 19.5x FY25E P/E (vs 17.7x prior), in-line with 10-year hist. avg. forward P/E, following sector re-rating and better outlook in FY26-27E. Reiterate BUY.