Cathay Pacific Haitong Securities: Maintaining TCL Electronics' (01070) “Overstock” Rating Target Price of HK$18.2

The Zhitong Finance App learned that Cathay Pacific Haitong Securities released a research report stating that maintaining the profit forecast for TCL Electronics (01070), EPS is expected to be HK$1.2/1.5/1.8 for 2026-2028, respectively, +23%/+25%/+20%, corresponding to 12/10/8 times PE each. Referring to the same industry, 15 x PE for 26 years, the target price is HK$18.2, maintaining the “gain” rating. The bank believes that the company has a strong alpha+ undervaluation+high dividend rating, the global share continues to rise, and high-end globalization is further advanced.

Cathay Pacific Haitong Securities's main views are as follows:

The company released 26H1 performance forecast

The company expects to achieve revenue of HK$603-65.7 billion in 2026H1, +10% 20% year-on-year; adjusted net profit of HK$1.48 billion is expected to be HK$1.65 billion, +40% 56% year-on-year; of these, 26Q2 achieved revenue of HK$3113.65 billion, +6% 24% YoY, and adjusted net profit of HK$1,101.27 billion, YoY.

The main TV industry is expected to grow steadily, and the growth rate of export sales may be higher than domestic sales

In median terms, 26Q2's revenue was +15% year-on-year. The bank expects the domestic sales structure to be upgraded to the main driver. Refer to the consolidated online and offline sales share of Aowei 26Q2 TCL's main brand +1.0pct, with an average price of +7%. The bank expects export sales to continue to grow relatively well. Driven by World Cup sporting events, the company's globalization and high-end strategy will advance steadily, and its overseas share will continue to rise.

Improved product structure and improved profitability

Referring to the forecast center, the company's adjusted net interest rate for 26Q2 was about 3.5%, +0.4 pct compared to the previous year. With the further implementation of globalization and mid-to-high-end strategies, the TV business maintains a leading position in the world and the product structure continues to improve, and the gross profit side performance has improved markedly; the monetization capacity of high-margin Internet services has been further enhanced, and the profitability of the small to medium display business has increased.

Risk Alerts

Raw material prices fluctuate, industry competition intensified, and macroeconomic uncertainty.