Investment Rating - The investment rating for the company is "Buy" [1][2][4] Core Insights - The report highlights that TCL Electronics has shown significant improvement in both sales volume and structure, particularly in the North American market, driven by the upcoming Black Friday sales [2] - The company's revenue and profit forecasts have been adjusted upwards, with expected revenues of HKD 95.8 billion, HKD 104.2 billion, and HKD 110.2 billion for 2024, 2025, and 2026 respectively, reflecting year-on-year growth rates of 21%, 9%, and 6% [1][2] - The report emphasizes the high certainty of performance and a dividend payout ratio exceeding 50%, indicating a balance of growth and value [2] Financial Projections - Revenue for 2023 is projected at HKD 79.1 billion, with a year-on-year growth of 11% [1] - The net profit attributable to shareholders is expected to reach HKD 1.32 billion in 2024, representing a 78% increase from the previous year [1][2] - Earnings per share (EPS) is forecasted to grow from HKD 0.29 in 2023 to HKD 0.52 in 2024, and further to HKD 0.64 in 2025 [1][2] Sales Performance - In Q3 2024, TCL's television shipment volume increased by 20%, with domestic sales growing by 5% and international sales by 20-25% [1][2] - The report notes that the sales structure has improved, with significant growth in high-end products such as miniled and large-screen televisions [2] Market Position - The company is expected to maintain a competitive edge in the market, with a focus on high-margin products and a strong presence in both domestic and international markets [2] - The report indicates that TCL's stock is expected to outperform the benchmark index by over 15% in the next 6-12 months [4]

Investment Rating - The report maintains a "Buy" rating for TCL Electronics, with a target price based on the last closing price of 5.97 HKD [1][3][9]. Core Insights - The global TV market is experiencing strong demand for large high-end products, and panel production capacity is shifting towards Chinese companies, which may lead to increased concentration among Chinese TV brands [3]. - TCL Electronics, as a leading player in the global TV industry, is seeing a continuous increase in its market share for smart screens and high-end large screen products. The profitability of its internet business remains stable, and innovative businesses such as solar energy and comprehensive marketing are growing rapidly, enhancing brand strength [3]. - The domestic business is expected to benefit from the appliance replacement policy, leading to further growth [3]. - The projected net profits for TCL Electronics from 2024 to 2026 are 1.415 billion, 1.610 billion, and 1.931 billion HKD, respectively, with corresponding EPS of 0.56, 0.64, and 0.77 HKD [3][4]. Summary by Sections Sales Performance - In the first three quarters of 2024, TCL's global TV shipments reached 20.01 million units, a year-on-year increase of 12.9%. In Q3 2024 alone, shipments totaled 7.49 million units, up 19.7% [1]. - The average screen size of global shipments reached 51.8 inches, with shipments of 65 inches and above increasing by 16.8%, and those of 75 inches and above rising by 35.3% [1]. - In the Chinese market, shipments increased by 5.3%, with the Thunderbird brand seeing a remarkable growth of 46.6% [1]. Regional Market Insights - In Europe, shipments grew by 35.5%, with shipments of 75 inches and above soaring by 126.5% [1]. - In North America, shipments increased by 8.2% in the first three quarters, with Q3 showing a significant rise of 27.5% [1]. - Emerging markets also saw a 6.0% increase in shipments, with Latin America and the Middle East/Africa markets growing by 12.1% and 22.7%, respectively [1]. Product Innovation - TCL's Mini LED TV shipments saw a remarkable growth of 162.8% year-on-year in the first three quarters of 2024, with domestic shipments increasing by 181.1% [1][3].

Investment Rating - Buy rating maintained for TCL Electronics (01070) [1] Core Views - TCL Electronics' global TV shipments in Q3 2024 reached 7.49 million units, a YoY increase of 19.7%, with Q1-Q3 global shipments at 20.01 million units, up 12.9% YoY [1] - MiniLED TV shipments surged 163% globally, benefiting ASP growth [1] - Domestic shipments in Q3 increased by 5%, while overseas shipments grew by 24% [1] - MiniLED domestic shipments in Q1-Q3 rose 181% YoY, with a significant 6.9 percentage point increase in market share [1] - Overseas MiniLED shipments in Q1-Q3 grew 145% YoY, with Europe leading at 36% growth, followed by North America at 8% and emerging markets at 6% [1] - Panel price pressures are expected to ease, with 55-inch and 65-inch panel prices stabilizing in Q3 2024, supporting margin improvement [1] - Profit forecasts have been revised upward, with expected revenue of HKD 95.5/107.8/119.9 billion for 2024-2026, and net profit attributable to shareholders of HKD 1.35/1.65/2.0 billion [1] Financial Performance - Revenue for 2024E is projected at HKD 95.476 billion, a 21% YoY increase, with net profit attributable to shareholders expected to reach HKD 1.35 billion, up 81% YoY [3] - ROE is forecasted to improve from 4.45% in 2023A to 7.66% in 2024E and 8.78% in 2025E [3] - EPS is expected to grow from HKD 0.31 in 2023A to HKD 0.54 in 2024E, HKD 0.65 in 2025E, and HKD 0.79 in 2026E [3] - Gross margin is projected to remain stable at around 18.05% in 2024E, with net profit margin improving to 1.41% [5] Market and Operational Trends - TCL Electronics has shown strong growth in both domestic and international markets, with significant contributions from MiniLED technology [1] - The company's dual-brand strategy (TCL + Leihua) has been effective in maintaining market share and driving growth in domestic markets [1] - Overseas markets, particularly Europe and North America, have shown robust growth, with North America experiencing a turnaround in Q3 2024 [1] - Cost pressures from panel price increases are expected to ease, supporting profitability improvements [1]

Investment Rating - The report maintains an "Accumulate" rating for TCL Electronics, indicating a positive outlook for the stock [2][7]. Core Views - The Q3 television shipment data exceeded expectations, with a significant increase in global shipments and a strong focus on high-end products [2]. - The company is benefiting from the domestic appliance replacement program, showing robust domestic sales and improved global competitiveness [2]. - The report forecasts earnings per share (EPS) for 2024-2026 to be HKD 0.56, 0.68, and 0.76 respectively, representing year-on-year growth of +90%, +21%, and +13% [2]. Summary by Sections - **Q3 Shipment Performance**: In Q3, TCL Electronics shipped 7.49 million televisions globally, a 19.7% increase year-on-year. Domestic shipments were 1.49 million (up 5%), while overseas shipments reached 5.99 million (up 24%) [2]. - **Market Performance**: North American shipments increased by 28%, driven by targeted marketing strategies, while European markets saw a 35.5% increase in shipments for the first three quarters [2]. - **Product Strategy**: The company is leading the trend towards larger and higher-end televisions, with shipments of 65 inches and above increasing by 16.8% and those of 75 inches and above by 35.3% [2]. - **Panel Pricing and Cost Management**: Panel prices have stabilized, alleviating cost pressures for televisions. The average prices for various panel sizes remained unchanged in early October [2]. - **Financial Projections**: The report projects revenue growth from HKD 78.986 billion in 2023 to HKD 94.213 billion in 2024, with net profit expected to rise significantly [4].

Investment Rating - The investment rating for TCL Electronics is "Outperform the Market" [1][7]. Core Views - The report highlights that TCL Electronics has achieved significant growth in its mid-term performance driven by its dual strategy of high-end and globalization, with a revenue increase of 30.3% year-on-year in 2024H1, reaching HKD 45.494 billion, and a net profit increase of 146.5% to HKD 650 million [3][7]. Financial Performance - In 2024H1, the overall gross margin decreased by 1.59 percentage points to 17.03%, while the adjusted net profit margin increased by 0.68 percentage points to 1.44%. The expense ratios for R&D, sales, and administrative costs decreased year-on-year [3][4]. - Revenue breakdown shows that display business revenue was HKD 30.135 billion, up 21.3% year-on-year, while internet business revenue was HKD 1.212 billion, up 8.9% [4][5]. - The company reported a significant increase in innovative business revenue, which rose by 60.6% year-on-year to HKD 13.953 billion, with solar energy revenue increasing by 212.7% [4][5]. Regional Performance - Domestic revenue for 2024H1 was HKD 19.064 billion, up 38.06%, while overseas revenue was HKD 26.429 billion, up 25.21%. Notably, revenue from Europe, North America, and emerging markets showed year-on-year growth of 47.14%, 4.32%, and 31.77%, respectively [4][5]. Market Position - TCL TV's global shipment volume increased by 9.2% year-on-year to 12.52 million units, with a market share of 13.3%, ranking among the top two global brands [5][7]. - The report indicates that TCL's MiniLED TV shipments grew by 122.4% globally, maintaining a leading position in the market [7]. Future Projections - The report forecasts that TCL Electronics' net profit will reach HKD 1.331 billion in 2024, with a year-on-year growth of 79%, and further growth is expected in the following years [6][7]. - The estimated reasonable value range for the stock is between HKD 6.36 and HKD 7.95, based on a 12-15x PE valuation for 2024 [7].

Financial Performance - TCL reported a revenue of HKD 45.494 billion, representing a year-on-year increase of 30.3%[4] - Gross profit reached HKD 7.748 billion, up 19.2% compared to the previous period[4] - Net profit attributable to shareholders increased by 146.5% to HKD 650 million[4] - Adjusted net profit attributable to shareholders rose by 147.3% to HKD 654 million[4] - The company's revenue increased by 30.3% year-on-year from HKD 34.92 billion in H1 2023 to HKD 45.49 billion in H1 2024[28] - The gross profit rose by 19.2% from HKD 6.50 billion in H1 2023 to HKD 7.75 billion in H1 2024, with a gross margin of 17.0%, down 1.6 percentage points year-on-year[33] - Profit before tax increased by 110.0% from HKD 420 million in H1 2023 to HKD 882 million in H1 2024, attributed to significant improvements across multiple business lines including display, internet, and innovative businesses[42] - Net profit for the period increased by 106.6% from HKD 316 million in H1 2023 to HKD 653 million in H1 2024, with attributable net profit rising by 146.5% from HKD 264 million to HKD 650 million, driven by scale expansion and improved operational quality[44] Operational Efficiency - The company's operating efficiency improved, with administrative expense ratio decreasing by 1.1 percentage points to 4.1%[7] - Sales and distribution expense ratio declined by 0.9 percentage points to 9.6%[7] - The overall expense ratio decreased by 2.0 percentage points to 13.7%[7] - The inventory turnover days improved to 69 days, one day faster than the previous year[8] - Cash turnover days were reduced to 36 days, two days faster than the previous year[8] Business Segments Performance - In the first half of 2024, TCL's display business revenue increased by 21.3% year-on-year to HKD 30.135 billion, driven by an optimized product mix and a growing share of high-end products[9] - The internet business revenue grew by 8.9% year-on-year to HKD 1.212 billion, maintaining a high gross margin of 54.0%[10] - Innovative business revenue surged by 60.6% year-on-year to HKD 13.953 billion, with gross profit increasing by 64.1% to HKD 2.009 billion[10] - The photovoltaic business saw revenue and gross profit increase by 212.7% and 322.5% year-on-year, reaching HKD 5.269 billion and HKD 543 million, respectively[10] - The small and medium-sized display business revenue grew by 10.7% year-on-year to HKD 3.761 billion, with a gross profit margin of 16.7%[16] - The smart commercial display business revenue increased by 11.3% year-on-year to HKD 460 million, with a gross profit margin of 13.8%[17] Market Share and Shipment - TCL TV global shipment volume reached 12.52 million units in the first half of 2024, a year-on-year increase of 9.2%, significantly outperforming the industry average[9] - TCL's global TV market share increased by 0.9 percentage points year-on-year to 13.3%, ranking among the top two global TV brands[12] - In the Chinese market, TCL TV shipment volume grew by 5.4% year-on-year, with revenue increasing by 21.1% to HKD 8.353 billion[13] - The shipment volume of TCL Mini LED TVs in China surged by 120.1% year-on-year, significantly increasing its market share[13] - In the first half of 2024, TCL TV's international market shipment volume increased by 10.4% year-on-year, with revenue growing by 24.2% to HKD 17.561 billion[14] - The shipment volume of TCL TVs sized 75 inches and above increased by 46.9% year-on-year, accounting for 8.4% of total shipments in North America, where TCL's retail market share rose by 0.5 percentage points to 12.5%[14] - In emerging markets, TCL TV shipment volume grew by 4.0% year-on-year, outperforming the industry average, with TCL maintaining the top retail market share in Australia, the Philippines, and Myanmar[15] - In Europe, TCL TV shipment volume increased by 40.1% year-on-year, benefiting from major sporting events, with retail market share ranking in the top two in France, Sweden, and Poland[15] Research and Development - R&D expenses reached HKD 1.093 billion in the first half of 2024, focusing on advanced display technologies and innovative products[11] - The company is investing heavily in R&D, with a budget allocation of HKD 5 billion for the development of AI and AR technologies over the next two years[167] Strategic Initiatives - TCL aims to capture the high-end market segment, with a focus on the growing demand for 75-inch and larger TVs, projected to achieve a compound annual growth rate of 25.0% from 2023 to 2025[24] - The company plans to enhance its global brand and channel advantages to expand its all-category marketing business, leveraging its established TV brand and channel presence[24] - TCL is committed to driving high-quality development through a strategy focused on "expanding scale, strengthening operations, activating organization, and globalization" in the second half of 2024[25] - The company will continue to innovate and expand in the photovoltaic and AR/XR markets, which are experiencing rapid growth, to seize industry opportunities[25] Cash Flow and Financial Position - As of June 30, 2024, cash and cash equivalents totaled approximately HKD 9.85 billion, a decrease of 8.3% compared to December 31, 2023, with 48.5% in RMB and 36.3% in USD[49] - The company reported cash inflows from operating activities of HKD 1,140,688 thousand, an increase from HKD 931,258 thousand in the same period of 2023, representing a growth of approximately 22.4%[62] - The net cash inflow from operating activities for the first half of 2024 was HKD 802,266 thousand, compared to HKD 441,149 thousand in the first half of 2023, indicating a significant increase of 81.8%[62] - The company reported a net cash outflow from investing activities of HKD 2,408,045 thousand for the first half of 2024, a decrease from HKD 2,883,959 thousand in the same period of 2023, showing a reduction of 16.5%[63] - The company reported a net loss attributable to shareholders of HKD 1,079,714 thousand for the first half of 2024, compared to a net loss of HKD 110,584 thousand in the same period of 2023, indicating a significant increase in losses[65] Shareholder Information - As of June 30, 2024, TCL Electronics Holdings Limited had a total of 2,520,935,155 shares issued, with major shareholders holding significant stakes, including TCL Industrial Holdings with 54.54%[139] - The company reported that the beneficial ownership of its directors and senior management included a total of 2,864,075 shares held by Du Juan, representing approximately 0.11% of the issued shares[136] - The company highlighted that the ownership structure includes various controlled corporations, indicating a diversified shareholder base[140] - The report emphasized the importance of compliance with the Securities and Futures Ordinance regarding the disclosure of shareholdings[138] Compliance and Governance - The audit committee reviewed the interim report and the unaudited condensed consolidated financial statements for the six months ended June 30, 2024[159] - All directors confirmed compliance with the standards of the company's securities trading code during the six months ended June 30, 2024[160] - The company received written confirmations from TCL Industrial Holdings and T.C.L. Industrial (Hong Kong) regarding compliance with the non-competition agreement during the specified period[161] Future Outlook - TCL Electronics anticipates a revenue growth forecast of 10% for the second half of 2024, supported by new product launches and market expansion initiatives[166] - The company is committed to sustainability, with plans to reduce carbon emissions by 30% by 2025 through energy-efficient product designs and manufacturing processes[164]

Investment Rating - The report maintains a rating of "Buy" for TCL Electronics [4][13]. Core Views - The ITC's initiation of a 337 investigation against TCL Electronics is characterized as a non-standard patent dispute, with limited impact on the company's operations in North America. The primary goal of the plaintiff, Maxell, is expected to be obtaining settlement compensation [4][10][13]. - The company is anticipated to benefit significantly from the domestic appliance replacement program, enhancing its position as a leading player in the black goods sector. The global competitiveness of TCL Electronics is continuously improving, entering a phase of quality enhancement and efficiency realization [4][13]. Summary by Sections Event Overview - On September 24, 2024, the ITC voted to initiate a 337 investigation concerning certain smart televisions, following a complaint filed by Maxell on August 22, 2024, alleging patent infringement related to several registered patents [9][10]. - The patents in question involve Bluetooth and Wi-Fi technologies, which are highly relevant to the interconnectivity of mobile devices and televisions [10]. Investment Recommendations - The report suggests that the ongoing patent dispute will not adversely affect TCL's sales in North America. The expected settlement costs are projected to be between USD 200,000 to 400,000 (approximately HKD 1.557 million to 3.114 million), assuming a one-time payment of USD 0.5 to 1 per TV sold [12][13]. - Earnings per share (EPS) forecasts for 2024-2026 are projected at HKD 0.56, 0.68, and 0.76, representing year-on-year growth of 90%, 21%, and 13% respectively [4][13].

Investment Rating - The investment rating for the company is "Buy-A" with a 6-month target price of HKD 5.78, while the current stock price is HKD 4.40 [1]. Core Views - The report highlights that TCL Electronics has shown significant revenue growth, with a 30.3% year-over-year increase in H1 2024, reaching HKD 454.9 billion, and a net profit increase of 146.5% to HKD 6.5 billion [4][5]. - The company's large-size display and innovative businesses are driving rapid revenue growth, with the large-size display business growing by 23% in H1 2024 [4]. - The report emphasizes the potential for TCL's overseas television market share to increase due to enhanced brand marketing and channel coverage [5]. Summary by Sections Financial Performance - Main revenue for 2022 was HKD 713.5 million, projected to grow to HKD 999.2 million by 2024 [2]. - Net profit is expected to rise from HKD 4.5 million in 2022 to HKD 20.7 million by 2026 [3]. - Earnings per share (EPS) are projected to increase from HKD 0.2 in 2022 to HKD 0.8 in 2026 [3]. Profitability and Valuation - The price-to-earnings (P/E) ratio is expected to decrease from 24.6 in 2022 to 5.4 by 2026, indicating improved valuation [4]. - The report forecasts a net profit margin increase to 1.5% by 2026, up from 0.6% in 2022 [6]. Business Segments - Domestic large-size display revenue is projected to grow at rates of 18% in 2024, 8% in 2025, and 8% in 2026, with a gross margin of 21.5% in 2024 [8]. - Overseas large-size display revenue is expected to grow by 23% in 2024 and maintain a gross margin of 13.9% [8]. - The photovoltaic business is anticipated to see a revenue increase of 120% in 2024, with a gross margin of 12% [8]. Cash Flow and Valuation - The report estimates the equity value of TCL Electronics at HKD 164.6 billion, with a projected EPS of HKD 6.53 [14][15]. - The report uses a discounted cash flow (DCF) model to assess the company's value, with key assumptions including a risk-free rate of 3.8% and a market return of 1.7% [14]. Market Position - TCL Electronics is positioned as a leading player in the global television industry, focusing on high-end and global operations [5]. - The company is leveraging its brand strength and channel resources to enhance its market share in the overseas television market [5].

Investment Rating - The investment rating for TCL Electronics is "Buy" with a target price of 6.05 HKD, indicating a potential upside of 28.5% from the recent closing price of 4.71 HKD [3]. Core Insights - TCL Electronics experienced a significant revenue growth of 30.3% in 1H2024, reaching 45.49 billion HKD, driven by its focus on mid-to-high-end products and ongoing globalization efforts [1]. - The company's net profit attributable to shareholders was 650 million HKD, a year-on-year increase of 146.5%, reflecting a substantial improvement in core business profitability [1]. - The display business revenue grew by 21.3% to 30.14 billion HKD, supported by global market expansion and brand influence [1]. - The global market share for TCL TVs increased by 0.9 percentage points to 13.3%, ranking among the top two global TV brands [1]. - The solar business saw a remarkable revenue increase of 212.7%, reaching 5.27 billion HKD, with a gross margin improvement of 2.7 percentage points [2]. Summary by Sections Financial Performance - In 1H2024, TCL Electronics reported a gross margin of 17.0%, a decrease of 1.6 percentage points year-on-year, attributed to product line adjustments [1]. - The adjusted net profit for the same period was also 650 million HKD, marking a 147.3% year-on-year increase [1]. - The overall revenue for the full year is projected to continue growing across various segments, including large and small display products, internet services, and innovative businesses [2]. Market Position - TCL's global TV shipment volume increased by 9.2% to 12.52 million units, significantly outperforming the industry average [1]. - The company achieved substantial growth in the overseas market, particularly in the European region, where TV shipments rose by 40.1% due to major sporting events [1]. Business Segments - The all-category marketing business revenue increased by 27.7% to 7.75 billion HKD, with a gross margin improvement of 1.1 percentage points [2]. - The internet business revenue grew by 8.9% to 1.21 billion HKD, with international market revenue surging by 51.2% [2]. - The solar business has expanded its reach across 23 key provinces in China, with over 150 signed projects and more than 1,200 distributors [2].

Investment Rating - The report assigns a "Buy" rating to TCL Electronics with a target price of HKD 6.05, representing a 28.5% upside potential from the recent closing price of HKD 4.71 [2][3] Core Views - TCL Electronics' 1H2024 revenue grew 30.3% YoY to HKD 45.49 billion, driven by its mid-to-high-end product strategy and global expansion [1] - Net profit attributable to shareholders surged 146.5% YoY to HKD 650 million, with adjusted net profit up 147.3% YoY [1] - The company's display business revenue increased 21.3% YoY to HKD 30.14 billion, with global TV shipments up 9.2% YoY to 12.52 million units [1] - TCL's global TV market share rose 0.9 percentage points YoY to 13.3%, ranking second globally [1] - The company's photovoltaic business revenue soared 212.7% YoY to HKD 5.27 billion, with gross margin improving 2.7 percentage points to 10.3% [2] Business Segment Performance Display Business - 75-inch and larger TV shipments grew 34.5% YoY, with Mini LED TV shipments surging 124.7% YoY [1] - European market TV shipments increased 40.1% YoY, with retail market share ranking top five in multiple countries [1] - Display business gross margin declined 1.9 percentage points to 16.9% due to product mix changes and rising panel costs [1] All-Category Marketing Business - Revenue increased 27.7% YoY to HKD 7.75 billion, with gross margin improving 1.1 percentage points to 16.3% [2] - Smart products including air conditioners, refrigerators, and washing machines maintained rapid growth in global distribution [2] Internet Business - Revenue grew 8.9% YoY to HKD 1.21 billion, with international internet business revenue surging 51.2% YoY to HKD 342 million [2] Photovoltaic Business - The business has covered 23 key provinces and cities in China, with over 150 commercial projects signed and more than 70,000 farmer contracts [2] - The distribution network has expanded to over 1,200 dealers [2] Financial Projections - 2024E revenue is projected at HKD 94.48 billion, with net profit of HKD 1.28 billion [6] - 2025E revenue is forecasted at HKD 100.32 billion, with net profit of HKD 1.52 billion [6] - Gross margin is expected to stabilize around 17.3%-17.8% from 2024E to 2026E [6] - ROE is projected to improve from 6.9% in 2024E to 9.4% in 2026E [6] Valuation - The stock is trading at 9.3x 2024E PE and 0.6x 2024E PB, with a dividend yield of 5.4% [6] - The target price of HKD 6.05 is based on 12x 2024E PE [2]