Citi: Reiterates "Buy" rating on TECHTRONIC IND (00669), target price HK$168

Citi released a research report giving TECHTRONIC IND (00669) a target price of HK$168 and a "Buy" rating. Company management attended a conference organized by the bank and reiterated its revenue growth expectations for FY2026-2027, which were not adjusted despite Federal Reserve rate hikes. The bank expects the company's revenue growth to accelerate from about 7% in FY2026 to about 9% in FY2027. Citi pointed out that following the divestiture of the HART power tools business last year, the consumer business will continue to shrink this year, which could drive operating margin expansion and may offer upside relative to market consensus. Meanwhile, the AI data center (AIDC) business could also drive revenue growth above market consensus. On cash flow, the company's free cash flow of at least US$1.3 billion this year will support continued dividend growth and underpin US$500 million in share buybacks through the end of 2027. The stock has pulled back about 15% over the past six weeks, which Citi believes offers a good buying opportunity. Management reiterated its FY2027 guidance breakdown, in which revenue for its own brand Milwaukee is expected to grow 10%-12%, Ryobi brand revenue growth is in the low-to-mid single-digit range, and revenue from other consumer goods businesses is flat or slightly down.