The Chinese smartphone market is fiercer and more competitive. China Mobile (00941 HK) has launched its own brand of 4G smartphones, and Chinese smartphone manufacturers have launched new smartphone series. The smartphone shipment forecast for the 14-16 fiscal year was lowered by 1.7%/2.4%/2.7%, respectively, due to Lenovo (00992 HK) introducing Motorola-branded smartphones and Xiaomi's aggressive pricing strategy. The average sales price of smartphones for the 14-16 fiscal years was lowered by 0.4%, respectively, due to a downward trend in the average price of smartphones in the Chinese market. The company's investment rating was maintained as “buy” and the target price was lowered from HK$2.75 to HK$2.64. The earnings per share forecast for the 14-16 fiscal year was lowered by 4.0%/4.2%/1.9%, respectively, due to adjustments in smartphone shipment volume and average sales price. The new target price is equivalent to 19.3 times the FY14 price-earnings ratio, 15.0 times the FY15 price-earnings ratio, 12.6 times the FY16 price-earnings ratio, and 3.9 times the FY14 price-earnings ratio. We maintain the company's investment rating as “buy” based on expanded distribution channels and approved corporate brands.