- Q1 adjusted profit soared 140% to HKD 3.84 billion on strong overseas sales.
- Revenue increased 15% year-over-year to HKD 29.2 billion, driven by high-end TVs.
- CITIC Securities maintained its "Buy" rating, citing sustained overseas growth potential.
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TCL Electronics Jumps After Q1 Profit Surges 140%
TCL Electronics Holdings Ltd. (1070.HK) reported first-quarter adjusted profit surged 140 percent to HKD 3.84 billion, as the consumer electronics giant benefited from a strategic push into higher-end overseas markets.
"The results were driven by a significant increase in gross margin and the successful promotion of high-end products abroad," CITIC Securities analysts said in a research report dated May 20, maintaining a “Buy” rating on the stock.
Total revenue for the quarter ending March 31 rose 15 percent year-over-year to HKD 29.2 billion. The company’s core television business saw both sales volume and average selling price increase, with performance in North America and Europe exceeding expectations. Its internet and photovoltaic businesses also contributed to the stronger profitability.
The strong earnings signal TCL's strategy of premiumization and international expansion is paying off, countering pressures in the broader consumer electronics market. CITIC Securities forecasts continued growth, projecting net profits of HKD 3 billion, HKD 3.7 billion, and HKD 4.6 billion for 2026, 2027, and 2028, respectively.
The brokerage's forecast implies forward price-to-earnings ratios of 13, 11, and 9 for the next three years, which it described as a reasonable valuation. The positive assessment suggests that the market may still be undervaluing the "overseas dividend" from TCL's continued expansion.
The robust performance and positive analyst outlook suggest TCL is effectively capturing the premium market segment abroad. Investors will be watching to see if the company can sustain this margin improvement and market share gains in its upcoming semi-annual results.
This article is for informational purposes only and does not constitute investment advice.
