FY14 results were lower than expected due to lower-than-expected smartphone shipments and average selling prices.

The forecast for smartphone shipments for fiscal year 15-16 was cut by 37.9% and 37.5% respectively, due to strong market competition and telecom operators reducing mobile phone subsidies in fiscal year 15.

Coolpad has opened up overseas markets and e-commerce platforms in response to telecom operators cutting mobile phone subsidies for the 15th fiscal year. Telecom operators account for 80% of Kupai's revenue in fiscal 14, and the company is changing its sales channels to e-commerce platforms to reduce the impact of operators reducing mobile phone subsidies in fiscal 15.

Maintain the company's investment rating as "buy" and lower the target price from HK $2.75 to HK $2.30. Due to the adjustment of smartphone shipments forecast, the forecast of earnings per share for fiscal year 15-16 was lowered by 19.0% and 20.0% respectively. The new target price is equivalent to 17.2 times the 15-year price-to-earnings ratio, 15.1 times 16-year price-to-earnings ratio, 13.8 times 17-year price-to-earnings ratio and 3.1 times 15-year price-to-book ratio. We maintain the company's investment rating as "Buy" as the company develops overseas markets and e-commerce platforms.