The main viewpoints of CICC are as follows:
The performance in the first half of 2024 met the expectations of both the bank and the market.
Qiu Tai Technology announced its performance for the first half of 2024: revenue increased by 40% year-on-year to 7.68 billion yuan, and net profit attributable to shareholders surged by 454% year-on-year to 115 million yuan. The company had previously forecasted a 400%-500% year-on-year growth in net profit for 1H24, and the actual performance aligns with the midpoint of the forecast, meeting the expectations of CICC and the market.
The performance of the company in 1H24 is particularly impressive due to several reasons: Firstly, driven by the demand from traditional Android customers and new orders from major clients in Shenzhen, the shipment volume of the company's mobile camera modules increased by 30% year-on-year to 217 million units during the 1H24 period, which improved the capacity utilization rate of module products, aiding in the recovery of gross profit margin. Secondly, the product structure of the company in 1H24 improved, with sales of mobile modules of 32M and above accounting for 49.2%, which positively impacted the gross profit margin. Lastly, from January to July, shipments in other areas such as automotive and IoT cameras increased by 83% year-on-year, far exceeding the company's annual shipment target of 50%.
Looking ahead to the second half of 2024, CICC believes that after more than two years of industry competition and inventory clearance, the turning point in the mobile optical module industry is gradually emerging. The bank is optimistic about Qiu Tai Technology, believing the company is likely to benefit as major Android clients grow together. Meanwhile, the automotive business, as the company's second growth curve, is also proceeding as planned. CICC suggests that investors closely monitor the progress of the company's profit recovery.
In the first half of 2024, Qiu Tai Technology's shipment volumes exceeded expectations, driving the recovery of capacity utilization. Looking forward to the second half of the year, the company is expected to gradually stabilize profits.
Reviewing 1H24, from the industry level, the bank believes that after more than two years of industry competition, the turning point of the mobile optical industry has gradually emerged since 3Q23, with cyclical recovery in the demand from mobile clients.
Focusing on Qiu Tai, considering the recovery of traditional Android customers and the incremental gains from major clients in Shenzhen, the company's shipment volume in 1H24 increased by 30% year-on-year, performing better than the industry average. At the same time, the capacity utilization rate is a key indicator for restoring profitability in the mobile module industry. The better-than-expected shipment volumes drove the company's gross profit margin for mobile modules to 5.6% in 1H24, up 2 percentage points year-on-year and better than the peak season performance last year.
Looking forward to 2H24, the bank believes that with the overall stabilization of the Android mobile market, the company is likely to maintain and enhance its market share, thereby gradually stabilizing its overall profitability and achieving cyclical recovery in profit levels.
