Investment Rating - The report upgrades the investment rating to BUY with a target price of HK4.63 [2][7]. Core Insights - The robust performance in 1H24 is attributed to improved gross margins (GM) and stable shipment volumes, with revenue and net profit soaring by 40.1% and 453.9% year-on-year, respectively [2][6]. - The company is expected to achieve a compound annual growth rate (CAGR) of 31% in earnings from FY24E to FY26E, driven by quality growth and gradual recovery in sales and GM [6][7]. - The non-smartphone segment, particularly in automotive and IoT, is showing significant growth potential, with automotive CCM sales volume up 15 times year-on-year in 1H24 [3][4]. Summary by Sections Financial Performance - In 1H24, QT's camera module (CCM) revenue increased by 44.5% year-on-year to RMB7,215 million, driven by higher average selling prices (ASP) and smartphone CCM shipment volume growth of 10.5% year-on-year [2][6]. - The blended GM improved by 1.8 percentage points year-on-year to 5.2%, supported by a better product mix and higher utilization rates [2][6]. Market Position and Strategy - QT aims to position itself as a Tier-1.5 player, providing both hardware and software solutions to Tier-1 clients, with expectations of higher ASP and GM in the long run for automotive CCM products [4][6]. - The company has successfully diversified its product mix and is exploring business opportunities in the automotive intelligent vision industry chain, including automotive lenses and LiDAR modules [3][4]. Shipment and Production - In 1H24, QT's total CCM shipment reached approximately 255 million units, with smartphone CCM contributing around 249 million units, reflecting a 25.8% year-on-year increase [2][6]. - The company has doubled its non-smartphone CCM shipment in 1H24, accounting for about 2.5% of total shipments, indicating strong progress in this segment [2][6]. Future Outlook - The report anticipates that QT's sales and net profit will grow at a CAGR of 13.0% and 31.5%, respectively, from FY24E to FY26E, as management focuses on long-term quality growth [6][7]. - The non-smartphone segment is expected to ramp up gradually, with minimal contribution projected for FY24E and FY25E [6][7].
丘钛科技：Gradually back on the right track