Lyon: Raise the target price of TCL Electronics (01070) to HK$18 and raise the earnings test rating to “outperform the market”

The Zhitong Finance App learned that Lyon released a research report stating that TCL Electronics (01070)'s revenue and adjusted net profit increased by 16.4% and 54.3% respectively in the first half of the year. Benefiting from the increase in the share of mini-LED products and the stronger performance of high-end products, its large-size display business grew by 12.5% and 29.6% in China and overseas, respectively. Sony's high-end products and TCL's strong distribution network will support further high-end development and faster overseas growth. The bank estimates that Sony will contribute 26.1 billion and HK$28.7 billion in revenue in 2027/2028. The bank sees the valuation of the acquired TCL air conditioning business as attractive, and that both TV channels can support its growth. The net profit forecast for each year 2026-28 was raised by 5% to 10%, and the target price was raised from HK$16 to HK$18. Maintain the “outperform the market” rating.