Anxin Hong Kong released a research report saying that maintaining the “increase in holdings” rating of Qiutai Technology (01478), the market is still watching the overall recovery pace of Android smartphones. The first half of the year was at the bottom of the company's performance. The second half of the year is expected to recover to a certain extent, but the magnitude is still limited. Based on the estimated price-earnings ratio of 20/12 times the company's 2024/2025 price-earnings ratio, the target price was HK$3.48. As a new leading company in optical tracks, the company's layout in the automotive, IoT, and VR fields is expected to become a new growth point for shipments, but currently the share is still small, and the impact of Android smartphone-related business on the company's revenue and profit is still large.
The report mentioned that the decline in mobile phone sales and the reduction in industry regulations have a double impact on demand. According to IDC data, global smartphone shipments fell 11% to 1.2 billion units in 2022, directly affecting the demand for mobile phone camera modules. At the same time, mobile phone manufacturers strategically upgraded specifications during the slowdown period, making the penetration rate of high-end CCM with 32M pixels and above falling short of expectations, which had a negative impact on the unit price of CCM and fingerprint modulated products. In 2022, the company's overall mobile phone CCM shipment volume was 417 million units, down 12.4% year on year; mobile phone CCM ASP fell 15.8% to 29.6 yuan/piece, causing the company's annual revenue to drop 26.3% to 13.76 billion yuan; the impact of factors such as market competition, the decline in the share of high-end products, and exchange rate fluctuations caused the company's gross margin to drop 5.5 percentage points to 3.9%.
In addition, the company continues to promote the layout of optical products in the fields of mobile phone terminals, vehicles, and VR: on the automotive side, the company cooperates with Tier 1 customers and machine manufacturers in the three high-end vehicle camera module products of ADAS, smart cockpit, and surround view. The products are already in the company's vehicle camera module products and have also been delivered for use in models of brands such as SAIC-GM-Wuling, Geely Automobile, Xiaopeng Motors, and Foton Daimler. While promoting camera modules, the company actively develops optical module products such as lidar and HUD to increase the value of the company's bicycle services; Full participation in the VR camera Among the modules, including product fields such as 6DoF, video perspective, eye tracking, and depth sensing, the VR Pancake folding optical path solution is expected to be mass-produced in the second half of 2023.