Investment Rating - The report gives TCL Electronics a "Buy" rating with a target price of HKD 8.22 per share, indicating a potential upside of 37% from the current price of HKD 5.99 [3]. Core Insights - TCL Electronics is focusing on high-end and global operations, leading to steady expansion in its TV business share. The company is also diversifying into telecommunications, commercial displays, and photovoltaic sectors, which opens up long-term growth opportunities [2][3]. - The company achieved a total revenue of HKD 791 billion in 2023, a year-on-year increase of 11%, with a net profit of HKD 740 million, reflecting a significant growth of 66% [2][3]. Summary by Sections 1. Company Overview - Founded in 1981, TCL has evolved from producing tapes to a wide range of smart terminal products and renewable energy solutions. The company has established a global presence since 1999, with overseas revenue consistently exceeding domestic revenue [1][24]. 2. Display Business - TCL is a global leader in the TV market, with a 2023 revenue of HKD 565.4 billion from its display business, which includes a 7.6% increase in smart screen revenue to HKD 486.3 billion. The global shipment of smart screens reached 25.26 million units, marking a 6.2% year-on-year growth [2][36]. - The company has solidified its position in the large-size display market, with a focus on high-end products and a dual-brand strategy that has led to a market share increase [34][36]. 3. Internet and Innovation Business - The internet business generated HKD 27.6 billion in 2023, a 20% increase, with a gross margin improvement to 55%. The company has partnered with major internet firms to enhance user experience and monetization [2][25]. - Innovation revenue surged by 78.5% to HKD 186.4 billion, driven by significant growth in the photovoltaic sector, which saw a revenue increase of 1820% to HKD 63 billion [2][25]. 4. Financial Analysis - The company reported a gross profit of HKD 148 billion in 2023, with a gross margin of 18.7%, reflecting a slight increase from the previous year. The operating efficiency has improved due to cost reduction and enhanced marketing strategies [2][6]. - TCL's financial health is robust, with a total market capitalization of HKD 15.1 billion and a debt-to-asset ratio of 73.28% [3][6]. 5. Investment Outlook - TCL Electronics is well-positioned in the global TV market, with a strong focus on high-end products and diversification into new business areas. The expected adjusted net profits for 2024, 2025, and 2026 are HKD 1.33 billion, HKD 1.61 billion, and HKD 1.93 billion, respectively [2][3].

Investment Rating - The report assigns a "Buy" rating for TCL Electronics (1070) with a target price of 7.00 HKD [2]. Core Insights - The report highlights significant performance improvement driven by breakthroughs in mid-to-high-end products and multi-business collaboration, with overall revenue for 2023 reaching 789.9 billion HKD, a year-on-year increase of 10.7% [2]. - The company's global television shipment volume increased by 6.2% to 25.26 million units in 2023, with a notable growth in shipments of 65 inches and above, which rose by 35.3% to 621 thousand units [2]. - The internet business has emerged as a second growth curve, with revenue increasing by 27.6% year-on-year to 18.64 billion HKD, contributing positively to overall profitability [2]. Financial Summary - Revenue for 2022 was 71,351 million HKD, with a forecasted increase to 78,986 million HKD in 2023 and projected growth to 84,554 million HKD in 2024 [3]. - Net profit for 2022 was 447 million HKD, expected to rise to 744 million HKD in 2023 and further to 1,111 million HKD in 2024 [3]. - The adjusted net profit for 2023 is forecasted at 803 million HKD, with a significant growth rate of 14.0% [3]. Business Performance - The report indicates that the television business has outperformed the overall market, with a revenue increase of 7.6% to 48.63 billion HKD despite a general decline in the television market [2]. - The domestic market's revenue grew by 5.4% to 16 billion HKD, with market share increasing to 18.1% [2]. - The company's operational efficiency improved, with an overall expense ratio decreasing by 1.5 percentage points to 66.4% [2]. Future Projections - The revenue projections for 2024-2026 are adjusted to 846 billion HKD, 931 billion HKD, and 1,000 billion HKD respectively, with net profit forecasts of 1111 million HKD, 1481 million HKD, and 1690 million HKD [2][3]. - The report anticipates continued growth in both domestic and overseas markets, with a focus on high-end product categories contributing positively to gross margins [2].

Financial Performance - TCL's revenue for the year ended December 31, 2023, was HKD 78,986 million, representing a 10.7% increase from HKD 71,351 million in 2022[25]. - The gross profit for 2023 was HKD 14,756 million, up 12.5% from HKD 13,112 million in the previous year[25]. - The net profit attributable to shareholders increased by 66.4% to HKD 744 million, compared to HKD 447 million in 2022[25]. - The adjusted net profit attributable to shareholders, based on non-Hong Kong Financial Reporting Standards, was HKD 803 million, a 14.0% increase from HKD 704 million[25]. - The gross profit margin improved by 0.3 percentage points to 18.7%, while the overall expense ratio decreased by 1.5 percentage points to 15.1%[30]. - Net profit attributable to shareholders increased by 66.4% year-on-year to HKD 744 million, with adjusted net profit rising by 14.0% to HKD 803 million[30]. - The group's net profit after tax increased by 49.3% year-on-year to HKD 827 million, with adjusted net profit rising by 14.0% to HKD 803 million[52]. - The company reported a gross margin improvement of 3% due to cost optimization strategies implemented in the supply chain[41]. - The company achieved a revenue of HKD 100 billion for the fiscal year 2023, representing a 10% increase compared to the previous year[169]. Product Development and Innovation - TCL launched new flagship products at CES 2023, including the Mini-LED smart screen QM8 and the AR smart glasses Thunder X2[18]. - TCL's QD-Mini LED smart screen X11G achieved a peak brightness of 5,000 nits and 5,184 zones, showcasing significant technological advancements[18]. - The company introduced the first AI-generated children's content program "Super Smart Drawing" in the internet TV industry[19]. - The innovative business segment saw a revenue increase of 78.5% year-on-year, reaching HKD 18.640 billion, with solar business revenue exceeding HKD 6.299 billion[31]. - TCL's Mini LED smart screen shipments surged by 180.1% year-on-year, capturing a significant share of the domestic market[32]. - The company is investing heavily in R&D, with a budget allocation of 5 billion HKD for the development of new AI technologies and smart appliances[42]. - The company aims to launch three new product lines in Q3 2023, including advanced OLED TVs and AI-driven appliances[168]. - The company is committed to high R&D investment, focusing on product innovation and developing advanced display technologies such as Mini LED, QLED, and 8K[198]. Market Expansion and Strategy - TCL expanded its market presence in North America with the launch of the new online streaming service TCLtv+, offering a variety of free entertainment programs[19]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% market share in the region by 2025[43]. - The company is exploring strategic acquisitions to enhance its product portfolio, with a focus on companies specializing in IoT and AI technologies[44]. - TCL's international sales accounted for 60% of total revenue, highlighting the company's successful global expansion strategy[42]. - The company is focusing on high-quality development in its core display and internet businesses while actively exploring new growth opportunities in renewable energy and emerging smart hardware[196]. Sustainability and Corporate Responsibility - TCL has maintained an ESG rating of A from the Hang Seng Index for six consecutive years, reflecting its commitment to sustainable development[34]. - The company is committed to sustainability, with plans to reduce carbon emissions by 30% by 2025 through energy-efficient product designs[43]. - The TCL Foundation has established 20 low-carbon campuses with a total installed capacity of 1,218.15 kW, providing 40.71 million kWh of green electricity, equivalent to saving approximately 13,077 tons of standard coal[178]. - The company is committed to social responsibility, actively participating in educational support and public charity activities[177]. - The company emphasizes corporate transparency and timely disclosure of relevant information, including annual and interim reports[172]. Governance and Management - The board consists of 8 directors, ensuring a diverse range of industry expertise to guide the company's long-term strategy and performance evaluation[107]. - The independent non-executive directors accounted for over half of the board during the year ending December 31, 2023, ensuring compliance with listing rules[110]. - The board has established a strategic committee responsible for key management decisions[153]. - The company has adopted a risk management and internal control mechanism to identify, assess, and manage significant risks effectively[158]. - The company has established written guidelines for employees regarding securities trading to ensure compliance with regulations[130]. Employee Engagement and Development - The total employee cost for the year ended December 31, 2023, was approximately HKD 5,838,566,000, with a workforce of 24,620 employees[100]. - The company recruited 1,923 new employees in 2023, with 82% holding a bachelor's degree or higher, focusing on R&D and marketing roles[176]. - The company has implemented a long-term incentive plan for senior management and key employees to enhance responsibility sharing and retention[175]. - The company aims to maintain a balanced gender ratio across its workforce, including senior management positions[143]. Financial Management and Dividends - The board proposed a final dividend of HKD 0.16 per share, up 26.0% from HKD 0.127 per share in the previous year[25]. - The company aims to distribute dividends at a target payout ratio of approximately 30% to 50% of the annual net profit[149]. - The board will consider various factors, including financial performance, cash flow, and capital requirements, before declaring dividends[148]. - The company plans to maintain a sustainable dividend policy while balancing shareholder expectations and capital management[149].

[Table_Page] 公告点评|耐用消费品与服装 证券研究报告 [【Table_广Title] 发海外】TCL 电子（01070.HK） [公Tab司le_I评nves级t] 买入 当前价格 4.28港元 收入稳步增长，盈利能力提升 合理价值 4.55港元 前次评级 买入 [ 核Tabl 心e_Su 观mm 点ary] ： 报告日期 2024-04-10 ⚫ TCL电子发布23年业绩公告。23年公司收入789.9亿港元（YoY+ [相Tab对le_P市icQ场uote表] 现 10.7%），归母净利润 7.4 亿港元（YoY+66.4%），毛利率 18.7% （YoY+0.3pct），净利率1.0%（YoY+0.2pct），销售/管理/研发/财务费 32% 用率同比-0.4pct /-1.1pct /-0.6pct/+0.2pct。23H2 主营收入 440.7 亿 19% 6% 港元 （YoY+17%），归母净利润 4.8 亿港元（YoY+142.3%），归母 -6%04/23 06/23 08/23 10/23 12/23 02/24 04/24 净利率1.1%（YoY+ 0.5pct）。收入稳步增长 ...

2024年04月03日 公 司点评 公 买入 / 首次 司 TCL电子(01070) 研 究 目标价: 昨收盘:3.57 2023H2 利润端增速靓丽，光伏业务规模实现指数级增长  走势比较 事件：2024年3月28日，TCL电子发布2023年年报。2023年公司 实现总营收789.86亿港元（+10.70%），归母净利润7.44亿港元（+66.36%）； 30% 2023H2 公司实现总营收440.70 亿港元（+16.98%），归母净利润 4.80 亿 太 16% 港元（+142.33%）。 平 2% 洋 (12%) 2023H2业绩增速靓丽，创新、互联网业务收入延续高增态势。1）分 证 时期看，2023H2公司实现总营收440.70亿港元（+16.98%），归母净利润 (26%) 券 4.80亿港元（+142.33%），业绩增速靓丽，主系公司中高端战略成效显著、 (40%) 股 持续扩大高利润业务分部规模叠加成本控制得宜带动盈利能力上升所致。 份 TCL电子 恒生指数 2）分业务看，a）显示业务：2023H2实现收入316.89亿港元（+3.16%）， 有  股票数据 其中大尺寸显示/中小尺寸显示/ ...

Investment Rating - The report maintains a "Buy" rating for TCL Electronics, with a target price of 5.5 HKD based on a 12x PE for 2024 [5][22]. Core Views - TCL Electronics has shown strong growth in both domestic and international sales of televisions, with a notable performance in the photovoltaic business. The gross margin remains resilient despite rising panel prices [3][22]. - The company has revised its earnings forecasts for 2024 and 2025 upwards by 77% and 76% respectively, and introduced a new forecast for 2026, expecting EPS of 0.46, 0.58, and 0.70 HKD, representing year-on-year growth of 55%, 27%, and 21% [3][22]. Financial Summary - In 2023, TCL Electronics achieved revenue of 78,986 million HKD, a year-on-year increase of 10.70%. The net profit attributable to shareholders was 744 million HKD, up 66.44% [10][22]. - The company reported a gross margin of 18.68% in 2023, a slight increase of 0.3 percentage points year-on-year [14][15]. - The revenue from the display business was 56,540 million HKD, a decrease of 2.36% year-on-year, while the innovative business revenue surged by 78.5% to 18,640 million HKD, primarily driven by the photovoltaic sector [11][13]. Revenue Performance - Domestic television sales increased by 5.4% year-on-year, while international sales rose by 8.7%. The average selling price for domestic televisions increased by 10.1% [11][16]. - The photovoltaic business saw remarkable growth, with revenue soaring by 1,820.3% to 6,300 million HKD [11][13]. Profitability Analysis - The gross margin for the television segment was impacted by rising panel prices, with domestic television gross margin at 23.0% and international at 15.4% [15][16]. - The internet business achieved a gross margin of 55.1%, reflecting a focus on high-margin vertical and innovative services [15]. Asset Position - As of the end of 2023, TCL Electronics had cash and cash equivalents totaling 11,680 million HKD, a year-on-year increase of 9.6% [19]. Incentive Plans - The company announced a stock incentive plan for 363 employees, which is expected to enhance company vitality and align employee interests with company performance [20]. Dividend Policy - The proposed dividend for 2023 is 0.16 HKD per share, with a payout ratio of 50% of adjusted net profit, reflecting a slight increase from the previous year [21].

[T Tab Cle_ LSt电ock子Nam（eR 0p 1tT 0yp 7e 0] ） 公司研究/港股点评 各业务边际向上，盈利修复 ——TCL 电子23年报点评 投资评级：买入（首次） 主要观点： [Table_Rank] 报告日期： 2024-03-30 [ ⚫T ab公le_司S发um布m2a0ry2]3 年业绩： ➢ H2：营收441亿港元（+17%），归母4.8亿港元（+142%），经调整 [收Ta盘bl价e_（Ba港se元D）at a] 2.83 归母5.4亿港元（+22%） 近12个月最高/最低（港元） 4.08/2.17 ➢ 全年：营收790亿港元（+11%），归母7.4亿港元（+66%），经调整 总股本（百万股） 2,508 归母8亿港元（+14%） 流通股本（百万股） 2,508 ➢ H2业绩超市场预期，且公司拟每股派息0.16港元，对应经调整归母 流通股比例（%） 100.00 分红率50%。 总市值（亿港元） 71 流通市值（亿港元） 71 ⚫ 收入：大尺寸驱动，份额向上 [公Ta司ble价_C格ha与rt]恒 生指数走势比较 ➢ 显示业务：H2收入同比+3.2%，其中大尺寸/中小 ...

Investment Rating - The investment rating for TCL Electronics is maintained as "Buy" [2][28]. Core Views - The report highlights that TCL Electronics has shown revenue and profit improvement in 2023H2, with a robust growth in domestic and international TV revenues. The company achieved a total revenue of HKD 79 billion in 2023, representing an 11% year-on-year increase, and a net profit of HKD 744 million, which is a 66.4% increase. In 2023H2, the revenue reached HKD 44.1 billion, up 17%, and the net profit was HKD 480 million, reflecting a 142% increase [12][28]. Summary by Sections 1. Revenue and Profit Improvement - In 2023, TCL Electronics reported a revenue of HKD 79 billion (+11% YoY) and a net profit of HKD 744 million (+66.4%). For 2023H2, the revenue was HKD 44.1 billion (+17%) and the net profit was HKD 480 million (+142%) [12][28]. 1.1 Revenue Breakdown - Domestic TV revenue in 2023 was HKD 16.016 billion (+5%), while international TV revenue was HKD 32.616 billion (+9%). In 2023H2, domestic TV revenue was HKD 9.12 billion (+3%) and international TV revenue was HKD 18.47 billion (+11%). The internet business revenue for 2023 was HKD 2.763 billion (+20%) and HKD 1.65 billion (+22%) in 2023H2. The solar business revenue surged to HKD 6.299 billion (+1820%) in 2023 and HKD 4.614 billion (+2861%) in 2023H2 [4][14][28]. 2. Profitability Improvement - The gross margin for 2023 was 18.7% (+0.3 percentage points), while for 2023H2 it was 18.7% (-0.7 percentage points). The report indicates that the TV business faced cost pressures, but the internet and full-category marketing segments saw significant gross margin improvements [5][17][21]. 2.1 Profitability Metrics - The report details that the net profit margin for 2023 was 0.9% (+0.3 percentage points) and for 2023H2 it was 1.1% (+0.6 percentage points). The adjusted net profit margin for 2023 was 1.0% and for 2023H2 it was 1.2% [17][21]. 3. Earnings Forecast and Investment Recommendations - The earnings forecast for 2024-2026 predicts net profits of HKD 915 million, HKD 1.114 billion, and HKD 1.309 billion respectively. The report suggests that the current stock price corresponds to a price-to-earnings ratio of 7.7 for 2024, 6.3 for 2025, and 5.4 for 2026, indicating a strong long-term outlook for TCL's smart screen business [28].

Financial Performance - The company's revenue for the year ended December 31, 2023, reached HKD 78,986 million, representing a year-on-year increase of 10.7%[3] - Gross profit increased by 12.5% to HKD 14,756 million, with an overall gross margin improvement of 0.3 percentage points to 18.7%[6] - Net profit attributable to shareholders rose by 66.4% to HKD 744 million, while adjusted net profit increased by 14.0% to HKD 803 million[3][7] - Total revenue increased by 10.7% from HKD 71.35 billion in 2022 to HKD 78.99 billion in 2023[31] - The adjusted net profit for 2023 was HKD 802.70 million, compared to HKD 704.39 million in 2022[30] - The gross profit for 2023 was HKD 14.755 billion, up from HKD 13.11 billion in 2022[30] - The profit attributable to shareholders was HKD 743,633,000 for the year ended December 31, 2023, compared to HKD 446,975,000 in 2022[51] - The company reported a net profit of HKD 826,809 for the year, an increase of 49.2% from HKD 553,834 in 2022[60] Revenue Breakdown - Internet business revenue grew by 20.2% to HKD 2,763 million, with a gross margin of 55.1%[9] - The company's innovative business revenue surged by 78.5% to HKD 18,640 million, driven by significant growth in the photovoltaic sector, which saw a revenue increase of 1,820.3% to HKD 6,299 million[9] - The small and medium-sized display business generated revenue of HKD 7.053 billion, a year-on-year decline of 40.2%, but improved gross margin by 6.3 percentage points to 22.2%[18] - The internet business achieved global revenue of HKD 2.763 billion, a year-on-year increase of 20.2%, with a gross margin improvement of 4.6 percentage points to 55.1%[20] - The revenue from the smart screen segment in the international market for 2023 was HKD 32,615,812, compared to HKD 29,999,916 in 2022, marking an increase of 8.6%[79] - The revenue from the smart screen segment in the Chinese market for 2023 was HKD 16,016,765, up from HKD 15,194,117 in 2022, representing a growth of 5.4%[79] Smart Screen Business - TCL's smart screen shipments increased by 6.2% to 25.26 million units, with a market share rise to 12.5% in global shipments[8] - The global market share of TCL smart screens increased from 5.6% in 2015 to 12.5% in 2023, with a year-on-year increase of 0.8 percentage points in shipment volume market share[12] - In 2023, TCL's global shipment of 65-inch and larger smart screens grew by 35.3%, with the average screen size increasing from 48.4 inches to 51.1 inches[13] - TCL Mini LED smart screen shipments surged by 180.1% year-on-year, while quantum dot smart screen shipments rose by 116.1%[13] - The retail market share of TCL smart screens in China increased by 3.5 percentage points to 18.1%, maintaining a top position in the market[15] - In the international market, TCL smart screen shipments rose by 10.0% year-on-year, with shipments of 65-inch and larger screens increasing by 60.3%[16] Research and Development - In 2023, the company's R&D expenses amounted to HKD 2.327 billion, focusing on smart terminal investments, including Mini LED technology, which supports the sales volume and revenue of Mini LED smart screens, maintaining the top position in the domestic market and second globally[10] - Research and development expenses for 2023 were HKD 2,326,980 thousand, a decrease from HKD 2,531,283 thousand in 2022, reflecting a reduction of 8.1%[85] - The company is committed to research and development, particularly in quantum dot technology and interactive display panels[119] Market Expansion and Strategy - The company is actively exploring new growth areas such as photovoltaic energy, all-category marketing, and AR/XR smart glasses to diversify revenue sources[5] - The company aims to enhance brand image and product quality while focusing on mid-to-high-end strategies and expanding global market share[28] - The company is focusing on expanding its internet business, which includes membership cards, video on demand, and advertising[78] - The company is currently evaluating the impact of new accounting standards on its financial reporting, with no significant effects anticipated[76] Financial Position and Debt - The capital debt ratio stood at 37.2% as of December 31, 2023, indicating a stable financial position[7] - The financing cost increased by 32.4% year-on-year to HKD 0.885 billion in 2023, attributed to rising U.S. federal funds rates[45] - The group held bank loans and other borrowings of approximately HKD 5,811,654,000 as of December 31, 2023, with fixed interest rates ranging from 0.60% to 6.64%[55] - The group's cash and cash equivalents amounted to approximately HKD 10,736,877,000 as of December 31, 2023, representing a year-on-year increase of 14.3%[55] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.16 per share, representing a payout ratio of 50.0% of adjusted net profit[7] - The company plans to distribute a final dividend of HKD 0.16 per ordinary share for 2023, up from HKD 0.127 per share in 2022, which is an increase of 25.8%[88] Corporate Governance and Compliance - The audit committee reviewed the annual performance for the year ending December 31, 2023, including the accounting principles adopted by the group [113] - The company confirmed compliance with the non-competition agreement for the period from January 1, 2023, to December 31, 2023 [115] - The group has established and will continue to optimize risk management and internal control systems [110]

Share Option and Award Schemes - The company proposes to adopt the 2023 Share Option Scheme and terminate the 2016 Share Option Scheme following the amendments to the listing rules effective from January 1, 2023[1]. - The 2023 Share Award Scheme is suggested to replace the 2008 Share Award Scheme, which expired on February 5, 2023, allowing the board to grant awards in the form of new and/or existing shares[2]. - The purpose of the 2023 Share Option Scheme is to recognize and incentivize participants for their contributions to the group's growth and development, aligning their interests with those of shareholders[3]. - Participants in the 2023 Share Option Scheme will include employee participants, connected entity participants, and service providers, with the potential inclusion of other contributors recognized by the board[4]. - A special general meeting is scheduled for November 3, 2023, to consider the adoption of the 2023 Share Option Scheme and the 2023 Share Award Scheme[5]. - The record date for shareholders to attend and vote at the special general meeting is set for October 30, 2023[5]. - The 2023 Share Plan encompasses both the 2023 Share Option Plan and the 2023 Share Award Plan[8]. - The company aims to terminate the 2016 Share Option Plan and adopt the new plans during the special general meeting[8]. Previous Share Award Plan - Additional information regarding the 2008 Share Award Scheme participants is provided in the 2022 annual report and the 2023 interim report[6]. - The 2008 Share Award Plan includes a wide range of participants, potentially covering employees, consultants, and contractors, among others[7]. - Participants in the 2008 Share Award Plan are categorized as "Others" if they do not fall under specific participant categories defined by the revised listing rules[7]. Governance and Reporting - The company is registered in the Cayman Islands and its shares are listed on the main board of the Hong Kong Stock Exchange[8]. - The board of directors includes both executive and non-executive members, ensuring diverse governance[12]. - The announcement serves as a supplement to the 2022 Annual Report and 2023 Interim Report, which should be read together[9]. - The company emphasizes the importance of contributions from various participants in its share incentive plans[9].