Citigroup has released a research report stating that TECHTRONIC IND (00669) exceeded expectations in both revenue and net profit for the first half of the year. This performance was driven by tariff relief, a product mix upgrade that led to EBIT margin expansion surpassing forecasts, and improved revenue growth in the consumer business. The bank anticipates that the U.S. labor shortage will create stronger demand for Milwaukee tools.
Management also indicated that there is potential for upward movement in the gross profit margin and EBIT margin in the second half of the year, supported by the continuous improvement of the Milwaukee product portfolio, the full-year impact of easing U.S. tariffs, and a lower seasonal proportion of outdoor sales in the second half. Citigroup has assigned a "Buy" rating to TECHTRONIC IND, citing a clear earnings recovery momentum and an accelerating pace of market share gains starting this year. The company has a strong track record over the past 15 years of launching new products and consistently capturing market share, making it one of the bank's top picks in the Chinese industrial sector. The target price has been raised from HK$150 to HK$168, with earnings forecasts for 2026 to 2028 increased by 4% to 5%.
In the global tool supply chain sector, Citigroup's preferences are ranked as follows: TECHTRONIC IND first, followed by Great Star Industrial (002444.SZ), then Chervon Holdings (02285), and finally Stanley Black & Decker (SWK.US).
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