TCL TECH.(000100)2025-01-17 02:53Investment Rating - The report assigns a neutral rating to TCL Technology with a target price of Rmb4.00, which corresponds to 1.3 times the expected price-to-book ratio for 2025, lower than its historical average by 0.7 standard deviations [4][5]. Core Insights - The domestic demand for large panels is expected to benefit from government subsidy policies, leading to a potential improvement in profits in the short term [1]. - The company anticipates that the price of large-size LCD panels will continue to show a slight upward trend due to improved supply-demand dynamics and reduced supply from domestic manufacturers [2]. - Profit margins are expected to improve due to higher utilization rates, rising prices, and cost reductions from upstream supply chain maturity and local material substitution [3]. Summary by Sections Demand and Supply Dynamics - The company reported a significant decline in TV demand in the first three quarters of 2024, but a noticeable improvement in demand is expected in the fourth quarter due to government consumption subsidy policies [1]. - Large-size panel production is nearing full capacity, while small-size LCD utilization remains above 80%, and OLED production is at full capacity [1]. Price Trends - The company believes that the price of large-size LCD panels has started to recover since December, driven by government subsidies and limited supply increases since 2022 [2]. Profitability Outlook - The anticipated improvement in profit margins is attributed to increased utilization rates, price increases, and cost reductions from upstream supply chain efficiencies [3]. Financial Projections - Revenue projections show a gradual increase from Rmb174.446 million in 2023 to Rmb212.718 million by 2028, with net profit expected to rise from Rmb2.215 million in 2023 to Rmb7.959 million in 2028 [7].