CICC Lowers Target Price for Qiutai Technology as Company Faces Declining Revenue in First Half of the Year
On August 9th, CICC (China International Capital Corporation) issued a rating report on Qiutai Technology, highlighting the company’s struggles in the first half of 2023. According to the report, the company’s revenue dropped by 23% year-on-year to 5.48 billion yuan, while its net profit attributable to the parent company fell by a significant 87% to 21 million yuan. These figures were not only below the company’s profit warning, but also lower than CICC’s expectations.
Qiutai Technology, a major player in the mobile phone module industry, has been impacted by the weak global demand for mobile phones. To adapt to the changing market conditions, the company plans to increase the proportion of module shipments above 32MP from 35% to 40% by the end of this year. This strategic shift reflects Qiutai Technology‘s focus on a high-end product structure.
However, CICC believes that the relatively weak global demand for mobile phones will continue to affect the company’s capacity utilization rate in the short term. Consequently, the bank has adjusted its profit forecast for Qiutai Technology. CICC lowered the profit forecast for this year by 63% to 127 million yuan and for next year by 34% to 299 million yuan.
As a result of these adjustments, CICC lowered its target price for Qiutai Technology by 39.4% to HK$4. Despite the challenges faced by the company, CICC maintained its rating of “outperform the industry.”
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