News Alert : Key subsidiary Kunshan QT China met the condition of listing in the Shenzhen ChiNext board
- Q Tech (1478 HK) announced that Kunshan QT China met the condition of listing in the ChiNext board
- Over 50% of capital raised will be allocated to R&D investment which will narrow R&D spread with peers
- Expect neutral share price reaction
What’s New
– Q Tech (1478 HK) announced after market closed yesterday that Kunshan QT China met the condition of offering and condition of listing in the ChiNext board of Shenzhen stock exchange.
– Kunshan QT China is Q Tech’s CCM business contributing 90%+ of Q Tech’s revenue.
– The terms of the offering, including the final size and price range of the Offering, and the timetable of the proposed listing have not yet been disclosed.
– Q Tech has applied separate listing of Kunshan QT China since end- 2020. The proposed spin-off is expected to unlock value of the Kunshan QT China.
Our View:
– We expect neutral share price reaction as the positive has been priced in. The share price has risen 23% after announcement on 11 Aug that the listing review of Kunshan QT China will have result on 17 Aug.
– We maintain BUY rating with TP at HK$5.2 on its premiumisation strategy to alleviate the negative impact of weak smartphone shipments.