[ET Net News Agency, 18 November 2020] Nomura raised its target price for Q Technology
(01478) to HK$12 from HK$11.3 and upgraded its rating to "buy" from "neutral" as Q Tech's
current valuation (at 11-12x 2021 EPS) is at a significant discount versus Sunny Optical's
(02382) 30x.
The research house thinks the Honor spin-off is neutral-to-positive for the handset
camera industry, as although the highest-end camera setup for the P/Mate series may not be
available for the new Honor's high-end products, given the lack of tailor-made ICs and R&D
team, Honor is also relatively aggressive in camera specs in mid-to-low end smartphones.
Although Q Tech's camera module business heavily relies on Vivo and Oppo, which could
be negatively impacted by the Honor spin-off, Q Tech has no meaningful sales exposure
to Xiaomi yet while initially the new Honor could increasingly use O-film and Q Tech as
camera module suppliers, rather than Sunny, due to changes in the supply chain strategy.
(KL)