Camera Module Manufacturer Q Technology Set to Recover Along With Smartphone Industry

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.