TCL Electronics (01070) surged 14% on Wednesday, driven by a bullish research report from CICC and news of a potential strategic partnership with Sony in the home entertainment sector.
CICC maintained its Outperform rating on TCL Electronics and raised its target price by 24.6% to HK$14.7, citing strong profit growth forecasts and the company's premiumization strategy. The firm expects TCL's 2025 adjusted net profit to grow 45% to 60% year-on-year, exceeding its equity incentive plan targets. Additionally, TCL is in discussions with Sony to establish a joint venture that could enhance its high-end product portfolio and global brand influence.
The potential partnership with Sony, which would involve a 51% stake for TCL in the joint venture, is seen as a significant growth driver. Sony's focus on the high-end TV market and its strong brand could provide TCL with a competitive edge in overseas markets and further solidify its position as a global leader in premium televisions.
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