We raised TP to HK$6.79 based on same 13x FY25E P/E, as we believe Q-tech will benefit from accelerated Android demand thanks to China national handset subsidy rollout in 1H25E. We revised up our FY25-26E EPS forecasts by 6-12% to factor in better Android demand in FY25/26E and FY24 positive profit alert.
　　Looking into 2025, we are positive on China smartphone subsidy, Q-tech’s non- mobile CCM (auto/ AR&VR) and ultrasound FPM biz ramp-up. We estimate Q- tech’s net profit to grow 102%/30% YoY in FY25/26E. Trading at 11.4x FY25E P/E, we think the stock is attractive. Reiterate BUY.
　　2025 outlook: Android demand, China subsidies, auto/AR&VR CCM,
　　ultrasound FPM. Looking into 2025, we are positive on China national subsidies to boost smartphone replacement cycle, and we expect Android smartphones are the key beneficiaries given price cap at RMB6,000. We expect Q-tech’s high exposure to Android clients and focus on high-end spec upgrade including OIS/periscope will boost its shipment/ASP in 2025.
　　As for non-mobile CCM, we are positive on rising NEV/ADAS penetration, AR/VR/IoT market. Ultrasound FPM is also another growth driver in FY25E.
　　Overall, we forecast net profit to grow 102%/30% YoY in FY25/26E.
　　FY24 positive profit alert of 200-280% YoY on high-end HCM demand,
　　better FPM and rising UTR. Q-tech preannounced FY24 net profit growth of 200-280% YoY, largely in-line with market expectations. Mgmt. attributed the increase to: 1) CCM/FPM share gains and sales improvement driven by smartphone, smart driving and IoT market under AI trend; 2) improving high- end HCM (32MP+) and FPM product mix led to GPM improvement; 3) rising UTR on CCM/FPM demand recovery and spec upgrade; 4) narrowing loss of an associate (Newmax in our view). As for tax dispute in India, India Q- tech received a rectification order on 9 Jan with a reduction of additional tax payable to RMB110mn (vs original amount of RMB152mn). Overall, we look forward to mgmt. updates on CCM/FPM business outlook and guidance during their FY24 earnings call in mid-Mar. n Reiterate BUY. On the back of China smartphone subsidy and Android share gains, we are positive on Q-tech’s Android high-end CCM ASP/GPM, non-mobile CCM ramp-up and ultra-sound FPM improvement in 2025. We revised up our FY25-26E EPS forecasts by 6-12%, above consensus by 24%/33%. Our new TP of HK$6.79 is based on same 13x FY25E P/E.
　　Reiterate BUY.