Guotou Securities: Maintains a "Buy-A" rating for TCL ELECTRONICS (01070) with a target price of HKD 18.96.

Guotou Securities released a research report stating that TCL ELECTRONICS (01070) is a leading global television industry enterprise, vigorously promoting mid-to-high-end and globalization business strategies. With the company's increased investment in overseas brand marketing and channel coverage, it is expected to continue to increase its market share in the overseas television market. Leveraging the brand power, channel resources, and vertical integration advantages of the display business accumulation, the company's photovoltaic business, all-category marketing, and other innovative businesses are entering a fast lane of development. It is expected that the company's EPS for 2026-2028 will be 1.18/1.40/1.66 Hong Kong dollars respectively, giving a 16 times price-earnings ratio valuation for 2026, corresponding to a target price of 18.96 Hong Kong dollars in six months. Maintain a buy-A investment rating. Key points of Guotou Securities: Event TCL ELECTRONICS announced its first-quarter performance in 2026. In 2026Q1, the company achieved a revenue of 29.23 billion Hong Kong dollars, YoY +15.3%; and a net profit attributable to the parent company of 0.36 billion Hong Kong dollars, YoY +123.6%. The bank believes that the company's prospects for overseas television business are broad, and innovative businesses such as photovoltaic business and all-category marketing are expected to contribute new growth momentum. Rapid growth of Q1 overseas television business and small and medium-sized display business The company continues to expand its global channel layout and deepen the construction of key channels, continuously improving terminal retail capabilities and brand influence. In Q1, TCL ELECTRONICS' overseas television revenue YoY+23.2%. The company's overseas television product structure upgrade continues to show results, with Q1 overseas Mini LED TV shipments accounting for 14.2%, a YoY increase of 8.2 percentage points. Q1 domestic television revenue YoY+3.9%, showing steady growth recovery. The company's small and medium-sized display business adheres to the strategy of prioritizing efficiency and focusing on key markets, deepening cooperation with first-line network operators in Europe and North America, and continuously consolidating strategic relationships with core partners. Q1 TCL ELECTRONICS' small and medium-sized display business revenue YoY+26.3%. In terms of internet business, the company continues to deepen cooperation with top platforms such as Google, Roku, Netflix, and TCLChannel's content richness and business monetization efficiency have greatly increased. Q1 internet business revenue YoY+13.2%. Continued improvement in profitability in Q1 Q1 TCL ELECTRONICS' gross margin YoY+1.5 percentage points, mainly due to: 1) Q1 large display business gross margin YoY+3.0 percentage points. 2) The increase in the proportion of high-margin overseas internet business revenue driving Q1 internet business gross margin YoY+10.6 percentage points. Q1 company's net profit margin YoY+0.6 percentage points. Risk warning: Sharp rise in panel prices, intensified industry competition, overseas trade policy risks. Note: The translations above are provided by an AI model and may not be completely accurate.