Q Technology Earnings: Profitability Widens Despite Intense Competition; Raised Valuation by 21%

We raised our fair value estimate for Q Technology, or Q Tech, to HKD 5.7 from HKD 4.7 as we think its competitive position in camera modules has improved, and we expect the trend to persist until 2026. At 0.75 times book value and 6.7 times 2025 forward price/earning, Q Tech’s shares are the most undervalued among our smartphone camera coverage, as we are more optimistic about its earnings recovery through 2025 due to product mix improvement and the overall demand recovery for smartphone camera modules.