CLSA Trims TECHTRONIC IND Target to HK$134 on Strong Flagship Brand Performance

Stock News03-31

CLSA has issued a research report indicating a reduction in the profit forecast for TECHTRONIC IND (00669) by 1.1% to 3.4% for 2026 to 2028, citing adjustments in lower-margin business segments. However, following the company's recent announcement to cancel the repurchase of 300,000 shares and its plan for a $500 million buyback over the next 18 months, the firm has slightly raised its target price-to-earnings ratio from 19.5x to 19.8x. This adjustment reflects investor approval of the share repurchase initiative amid macroeconomic uncertainties. Consequently, the target price has been lowered from HK$136 to HK$134, while maintaining an "Outperform" rating.

The combined sales of TECHTRONIC IND's flagship brands, Milwaukee and Ryobi, recorded mid-to-high single-digit growth. Nevertheless, other business areas may continue to face headwinds due to restructuring efforts and broader economic uncertainties. Milwaukee achieved 15% sales growth driven by demand from data centers. The brand's dominant position in mechanical, electrical, and plumbing sectors is expected to support long-term double-digit growth, underpinned by highly visible non-residential end-market demand.

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