2369.HK yesterday reported a 47 per cent increase in net profit to HK $513 million. However, Credit Suisse believes that in the second half of last year, the profit margin is expected to fall below the 10% level for the first time, reflecting the fierce competition in the smartphone market in mainland China and the impact of the destocking of 3G phones. It is expected that the gross profit margin will continue to be under pressure. Among them, the gross profit margin of the "God" series of mobile phones is close to zero and will record a loss this year. The profit forecast for this year and next year will be lowered by 18% and 11%, the rating will be lowered from neutral to outperform the big market, and the target price will be cut by 22% to HK $1.25.