Jinwu Financial News | According to CMB International Development Research Report, the bank recently exchanged views with the management of Qiutai Technology (01478) and maintained an optimistic view that the recovery of high-end Android phones will drive ASP/shipment growth in 2024. The company also anticipates that GPM will improve in 1H24E, benefiting from a better product portfolio and reduced competition in the industry. In the first quarter of 2024, the company's mobile/non-mobile camera module shipments increased 23%/179% year-on-year respectively, mainly benefiting from industry inventory replenishment, customer project cycle, and automotive/IoT order acquisition.
The bank increased 2024-2025 earnings per share by 2-5% to consider better ASP/shipments. The stock is currently valued at a price-earnings ratio of 9.7x/7.1x 2024/2025 (compared to the 8-year historical average PE of 18x), and the bank considers the stock extremely attractive. Maintaining a “buy” rating, the new target price is HK$3.93 (previously HK$3.74), based on 11.0xFY24EPE (previously 10xPE), mainly due to higher profit visibility. Future share price catalysts include new product launches and better monthly shipments.