Caitong Securities: Maintains 'Buy' Rating for TCL Electronics (01070) Amid Accelerated New Product Launches

According to Zhitong Finance APP, Caitong Securities released a research report stating that in 2026 TCL Electronics (01070) $TCL ELECTRONICS (01070.HK)$ Structural optimization on the product side and expansion into high-end channels in North America and Media Market channels in Europe; progress for new products in the global mid-to-high price range is proceeding smoothly. The company is expected to achieve adjusted net profits attributable to shareholders of 3.04/3.45 billion Hong Kong dollars in 2026-27, corresponding to PE ratios of 11.5/10.1x, maintaining a 'Buy' rating.

The main viewpoints of Caitong Securities are as follows:

Event

On April 19, 2026, the company released its first-quarter 2026 earnings report. In 1Q2026, the company’s revenue was between 27.8-30.4 billion Hong Kong dollars, representing a year-on-year increase of 10%-20%; adjusted net profit attributable to shareholders was 360-400 million Hong Kong dollars, reflecting a year-on-year growth of 125%-150%.

First-half 2026 profitability is expected to grow steadily.

Based on year-on-year growth rates, the adjusted net profit attributable to shareholders in the first quarter of 2025 was approximately 160 million Hong Kong dollars, while in the second quarter of 2025 it was about 900 million Hong Kong dollars. If we assume a profit growth rate of around 10% for the second quarter of 2026, the estimated range for the adjusted net profit attributable to shareholders in the first half of 2026 is 1.35–1.39 billion Hong Kong dollars, with a year-on-year increase of approximately 27%-31%.

The focus is not on the forecast but rather on the accelerated pace of new TV product releases.

In 1Q2026, domestic brands TCL and Hisense launched 8 and 4 new TV models respectively; overseas brands Samsung and LG launched 0 and 2 new TV models respectively. TCL continued to increase its number of new TV releases compared to the same period last year (7 models last year). In terms of technical specifications, six of TCL's new TV models—Q9MPro, T7MPro, T7MUltra, Q10M, Q10MPro, and C12L—are equipped with SQD-MiniLED display technology and reflective film, with improvements also seen in refresh rates and the number of zones.

Risk Warning:Risks include political uncertainty in Europe, uncertain sales in high-end markets in North America, and insufficient domestic demand within the country.

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