Everbright Securities has released a research report indicating that Q TECH (01478) achieved substantial year-on-year growth in both annual revenue and net profit for 2025. The company's product mix for smartphone camera modules continued to improve, while revenue from camera modules for non-smartphone applications experienced significant growth. However, considering that rising memory chip prices may pressure the average selling price (ASP) and gross margin of its smartphone camera modules, and given the persistence of these price increases, Everbright Securities has lowered its net profit forecasts for 2026 and 2027 by 6% and 7% to 879 million yuan and 1.091 billion yuan, respectively. A new net profit forecast for 2028 has been set at 1.380 billion yuan. The brokerage believes the company's current valuation already partially reflects the negative expectations from memory price hikes. Given the anticipated continued strong growth in Q TECH's non-smartphone camera module business and its significant progress in diversifying across multiple optical technology sectors, Everbright Securities maintains a "Buy" rating.
Key points from the report are as follows:
On March 16, 2026, Q TECH announced its full-year results for the period ending December 31, 2025. For the full year 2025, the company reported revenue of 20.877 billion yuan, a 29.3% year-on-year increase. The gross margin improved by 1.7 percentage points to 7.8%, attributed to the company's ongoing focus on mid-to-high-end camera modules and accelerated development of its camera module business for non-smartphone areas like automotive and IoT. Net profit surged 435.2% year-on-year to 1.494 billion yuan. After adjusting for gains related to the equity arrangement of its Indian subsidiary, net profit still saw a significant increase of 144.4% to 680 million yuan.
In 2025, the product structure for smartphone camera modules continued to optimize, while revenue from non-smartphone camera modules grew substantially. Attention is turning to the potential impact of memory price increases on ASP and gross margins in 2026. 1) The company's smartphone camera module shipment volume increased by 3.0% year-on-year in 2025. Notably, periscope camera module shipments surged by 270.1%, significantly exceeding the guidance of at least 100% growth. Looking ahead to 2026, against the backdrop of rising memory prices, market concerns include potential declines in smartphone sales and potential specification reductions in mid-to-low-end handset optics, which could pressure the ASP and gross margins of smartphone camera modules. However, with Q TECH's ongoing vertical integration in visual systems, the brokerage believes the company possesses some resilience in profitability during a downturn. The outcome of price negotiations for new smartphone projects in the second half of the year will be a key focus. 2) Revenue from non-smartphone camera modules reached 5.055 billion yuan in 2025, a substantial 171.2% year-on-year increase. The compound annual growth rate from 2021 to 2025 was 89.6%. The proportion of non-smartphone modules to total camera module revenue rose to 26.9%, exceeding the target of 25% or more set in the company's first five-year plan announced in 2021. Shipment volume for these modules grew 111.0% year-on-year, with a 2021-2025 CAGR of 71.3%. Optimization of the product mix helped drive the overall camera module ASP up 19.7% to 40.8 yuan. The company has a broad portfolio of optical products for drones and handheld imaging devices, encompassing camera modules, vision modules, and LiDAR. Everbright Securities anticipates that, benefiting from the rapid growth of the handheld imaging device market, Q TECH's non-smartphone camera module shipments will continue their strong growth trajectory. The company's second five-year plan targets non-smartphone camera module revenue exceeding 50% of total camera module revenue.
The company's business expansion across multiple optical technology sectors has yielded significant results. 1) In the smart glasses sector, Q TECH has established collaborations with 18 domestic and international manufacturers. Small-batch deliveries have been achieved for two major overseas terminal customers, and the world's smallest display engine based on Micro-LED has also completed small-batch delivery. 2) In the embodied robotics field, the company, partnering with industry leaders such as Nanjing Vision Starlight and Digua Robotics, has introduced a binocular RGB-dToF fusion perception solution to enhance industry perception capabilities. 3) In the smart driving sector, Q TECH has established business relationships with 7 global Tier-1 smart driving suppliers and 35 automotive brands. Breakthroughs have been made in LiDAR transceiver business, and shipments of automotive camera modules using Chip-on-Board (COB) technology rank among the industry leaders.
In 2025, shipment volume for biometric recognition modules increased steadily. Shipments reached 203 million units, a 25.8% year-on-year increase, further consolidating the company's market share and leading industry position. Driven by both volume growth and product specification upgrades, capacity utilization for biometric modules continued to improve, contributing to an increase in gross margin.
Regarding profit forecasts, valuation, and rating: Considering potential pressures on smartphone camera module ASP and gross margins from persistent memory price increases, net profit forecasts for 2026 and 2027 have been revised downwards. Nevertheless, given the expected continued strong growth in non-smartphone camera modules and successful diversification, the "Buy" rating is maintained.
Risk factors include: potential decline in smartphone demand and camera module specification reductions due to memory price hikes; intensified competition in the camera module industry; slower-than-expected growth in IoT and automotive camera module businesses; and risks associated with changes in tariff policies.
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