Stock Abbreviation: Q TECH
Stock Code: 1478.HK

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Q Technology (Group) Company Limited Announces 2019 Interim Results 2019-08-13

Q Technology 2019 Interim Results Press Release
12 August 2019

PRESS RELEASE - FOR IMMEDIATE RELEASE

Q TECHNOLOGY (GROUP) COMPANY
LIMITED
(Stock Code:1478.HK
 
Announces 2019 Interim Results
***
Recorded a significant growth in sales volume of camera modules
Achieved A Profit Turnaround In 2019 Interim Results
Results Highlights

(RMB’000)

Unaudited interim results for the six months ended 30 June

 

2019

2018

Change

Revenue

5,060,945

3,206,712

+57.8%

Gross profit

415,205

39,056

+963.1%

Gross profit margin

8.2%

1.2%

+7.0 ppts

Profit/(loss) for the period

180,833

(51,288)

NA

Earnings per share (Basic)

15.9 cents

(4.6)cents

NA

       

Sales volume of camera modules (M units)

182.51

102.85

+77.5%

Sales revenue of fingerprint recognition module (RMB’000)

1,121,750

620,921

+80.7%

 

(12 August 2019, Hong Kong) Q Technology (Group) Company Limited (“Q Technology” or the "Company", SEHK stock code: 1478, or together with its subsidiaries collectively referred to as the "Group"), a China’s leading camera module and fingerprint recognition module manufacturer for mid to high-end mobile terminal, announced the unaudited interim results of the Group for the six months ended 30 June 2019 (the “Period under review”).

 

During the period under review, given the global economic development has been facing various challenges and intensifying international trade disputes, the recovery of global economy has been subject to great uncertainties. Nonetheless, the continuing pursuance for enhanced features such as better photo-shooting effects, handset appearance, privacy protection and mobile payment security from China smartphone brands, it has prompted development of camera modules to trends of higher pixels, triple camera modules and multiple camera modules。It also propelled rapid development of products such as periscope camera modules with multi-fold optical zoom, 3D camera modules and under-glass fingerprint recognition modules, which led to a rapid increase in sales volume of camera module amid a decline in sales volume of smartphone and thus helped the Group to further achieve a remarkable business performance despite a tough external economic environment.

 

During the Period under review, the revenue of the Group reached approximately RMB5,060,945,000, representing a substantial increase of approximately 57.8% as compared with approximately RMB3,206,712,000 in the corresponding period of last year. The year-on-year (YoY) increase in revenue was mainly attributable to the substantial increase in sales volume of camera modules and the significant improvement in product mix of the fingerprint recognition modules.

 

With the trust and support of our core customers and the relentless efforts of all our employees, the Group’s strategy of expanding the scale of sales of camera modules and enhancing market position has been realised. The sales volume of camera modules reached approximately 182.51 million units, representing an increase of approximately 77.5% as compared with approximately 102.85 million units in the corresponding period of last year. The proportion of sales volume of camera modules with resolutions of 10 mega pixels and above to the sales volume of camera modules was approximately 46.8%, increased by approximately 7.1 percentage points as compared with 39.7% of the corresponding Period in last year. The rapid growth in sales volume of camera modules was mainly attributable to three major reasons: (i) the Group’s customer structure has become more sophisticated, and its position as the vendor of the leading smartphone branded customers in China has been improved and the Group has captured more market share successfully; (ii) configuring a multi-camera module for smartphones has become a trend, which further promotes the steady expansion of market demand; and (iii) the production capacity of camera modules of the Group increased from approximately 35 million units per month as at the end of 2018 to approximately 42 million units per month at the end of the Period. The automation upgrade was also highly effective and improved our delivery capacity.

 

The sales volume of fingerprint recognition modules was approximately 37.75 million units, representing a decrease of approximately 16.6% as compared with approximately 45.27 million units in the corresponding period of last year, and sales revenue was approximately RMB1,121,750,000, representing a remarkable increase of approximately 80.7% as compared with approximately RMB620,921,000 in the corresponding period of last year. The main reasons for the decline in sales volume of fingerprint recognition modules and the significant increase in sales revenue were: (i) the Group took the initiative to reduce the coating fingerprint recognition module projects with unreasonable profitability; and (ii) the effective business expansion of the optical under-glass fingerprint recognition modules with higher average selling price and the sales volume of under-glass fingerprint recognition modules accounting for approximately 51.0% of the sales volume of the fingerprint recognition modules of the Group during the Period, which drove a significant increase in average selling price of the fingerprint recognition module to approximately RMB29.7 from approximately RMB13.7 in the corresponding period of last year.

 

The Group’s gross profit margin was approximately 8.2%, representing an increase of approximately 7.0 percentage points from approximately 1.2% in the corresponding period of last year. The main reasons of the increase in gross profit margin were: (i) the Group’s strategy of actively expanding its sales scale has gradually demonstrated its effectiveness and improved the utilization rate of camera modules capacity and reduced the marginal cost; (ii) although the sales volume of fingerprint recognition modules decreased by approximately 16.6%, its product mix improved significantly that led to the improvement in the gross profit margin of fingerprint recognition modules; and (iii) an encouraging result of the long-term promotion of production automation upgrade of the Group has been gradually achieved which optimized the labour costs as compared with the corresponding period of last year.

 

During the Period under review, the Group continued to promote the R&D of camera modules in three areas which include: new materials, new processes and new products. The Group also continued to strengthen the development of different areas such as: (i) the application of miniaturization processes such as Molding on Chip (MOC), Molding on Board (MOB) and Filter and Metal in Holder (FAMIH); (ii) the R&D of camera modules with higher pixels such as 48 mega pixels, 64 mega pixels and 104 mega pixels; (iii) the development of super wide-angle field of view, periscope camera modules with multi-fold optical zoom, large-size optical under-glass fingerprint recognition modules and liquid crystal display (LCD) compatible optical under-screen fingerprint modules; and (iv) the R&D of 3D camera modules. After the mass sales of the front 3D structured light modules to customers in the 3Q of the previous year, the Group also accelerated the R&D of the time of flight (ToF) 3D modules to cater for the needs of 3D module products such as Internet of Things (IoT), Virtual Reality (VR), Augmented Reality (AR), Mixed Reality (MR), intelligent manufacturing and other relevant industries, in order to consolidate the Group’s leading position in 3D module technology and to provide the highest quality products and experiences for customers.

 

Chairman and Executive Director of Q Technology, Mr. He Ningning said, “We will uphold the vision of “To bring light to the machines”, and adhere to the mission of “Providing intelligent vision systematic products for intelligent mobile terminals” and enhance its capability development in three aspects, namely optical design, precision manufacturing and system integration to improve our core competitiveness, continue to enhance the R&D of new products and new processes to meet customers’ continuous product mix optimization demand. We will also improve our precision manufacturing and automation capabilities to optimize production costs and to strengthen customer relationships marketing to balance the sales proportion of major customers; aggressively expand overseas renowned smartphone branded customers in hedging exchange rate risk; and focus on developing high pixels camera modules, multiple camera modules, 3D modules, periscopic camera modules, under-glass fingerprint recognition modules and other high-end products in order to provide desirable service experience for our core customers.

 

In 2019, with the trust and support of our core customers and the relentless efforts of all our employees, the Group will strive to achieve the objectives as follows: (i) to increase the shipment of camera modules in 2019 by no less than 50%, of which the proportion of shipment of camera modules of 10 mega pixels and above will account for no less than 50%; (ii) to maintain the proportion of shipment of under-glass fingerprint recognition modules in 2019 of no less than 40% of the shipment of fingerprint recognition modules, and (iii) to gradually expand the production capacity of camera modules to no more than 50 million units per month through constant review of the customers’ demands and the business development of the Group. We are confident in leading the Group to embrace the challenges, making further efforts to achieve better development and striving to create greater value for the shareholders of the Group.”

 

 - Ends -

 

About Q Technology (Group) Company Limited

 

Q Technology is one of the world leading mid to high-end mobile terminal camera module and fingerprint recognition module manufacturers. Q Technology is dedicated to become an intelligent vision company by providing machine vision and human vision to mobile terminals, automobile and robots through continuous improvement in the capabilities in optics design, precise manufacturing and systems integration.

 

For enquiries, please contact LBS Communications Consulting Limited:

Joanne Chan   Tel:(852)3679 3671 E-mail:jchan@lbs-comm.com

Ian  Fok        Tel:(852) 3752 2678 E-mail:ifok@lbs-comm.com

Stella Chan    Tel:(852)3752 2673 E-mail:schan@lbs-comm.com