Tianfeng Securities released a research report stating that it maintains a 'buy' rating on TCL Electronics (01070). With reference to the stock-based incentive targets, the company's adjusted net income attributable to shareholders is expected to be HKD 1.35/1.64 /1.97 billion in 2024-2026. In the first half of 2024, the company's adjusted net income attributable to shareholders is expected to increase by approximately 130%-160% year-on-year. According to the calculations, the company is expected to achieve an adjusted net income attributable to shareholders of HKD 0.6-0.68 billion in the first half of 2024. The high-end and global strategic effects in the TV business are remarkable, and the Internet business is expected to continue to make a stable contribution to performance. The innovative business has entered the stage of volume growth. The bank is bullish on the company's solid global leadership position in the television field, as well as the medium- and long-term performance elasticity brought by the expansion of new business scale and profit improvement.
The report stated that the global TV market pattern is clear, and the market share of domestic black and white electronics leaders is expanding. On the industry side, according to Ovirom data, the global TV shipments in Q1 2024 were 43.2 million, a year-on-year decrease of 0.8%, indicating that the global space of the industry has stabilized to some extent, and TV demand in Europe and emerging markets has rebounded. On the company side, TCL brand global shipments in Q1 2024 exceeded the industry by a year-on-year increase of 4%. In addition, the company vigorously promoted the high-end strategy in the first half of the year and promoted the structural upgrade represented by Mini LED. The global operation has been deepened. According to Ovirom, the company's shipments in the Chinese market grew the fastest in Q1 2024 (a year-on-year increase of 13.7%), and European shipment scale increased significantly (a year-on-year increase of 9.5%). The scale of shipments in North America is leading. The growth of shipments in emerging markets was 4.1%. At the same time, it actively develops new businesses and promotes significant improvement in the operating performance of multiple business lines including display and innovative businesses. On the cost side, benefiting from economies of scale and improving quality and efficiency, the company's overall expense ratio in the first half of 2024 effectively decreased and operating efficiency continued to improve.
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