Guojin Securities has maintained a "Buy" rating on Techtronic Ind (00669). The firm forecasts the company's revenue for 2026, 2027, and 2028 to reach $16.84 billion, $18.62 billion, and $20.63 billion, respectively, representing annual growth rates of 10.4%, 10.6%, and 10.8%. Net profit attributable to shareholders is projected to be $1.42 billion, $1.68 billion, and $1.99 billion, with year-on-year increases of 18.8%, 18.2%, and 18.0%, corresponding to price-to-earnings ratios of 20.4x, 17.2x, and 14.6x. Given Techtronic Ind's leading position in the power tools industry and its significant competitive advantages, coupled with an expected recovery in tool demand amid the North American interest rate cutting cycle, the brokerage anticipates continuous improvement in the company's market share and profitability.
The company disclosed its annual report on March 3, 2026, revealing a 2025 revenue of $15.26 billion, up 4.4% year-on-year, with second-half revenue at $7.43 billion, a 1.6% increase. Net profit attributable to shareholders for 2025 was $1.20 billion, rising 6.8%, while second-half net profit was $571 million, down 0.3%.
Core business segments demonstrated steady growth, with the revenue slowdown primarily attributed to tariff impacts and a contraction in non-core operations. By brand, the professional-grade power tool brand Milwaukee reported a 7.9% revenue increase in local currency terms for 2025, with North America, Europe, and other regions growing by 7.5%, 11.0%, and 6.6%, respectively. Growth in the second half slowed to 4.5% from double digits in the first half, mainly due to the temporary suspension of sales and promotion for products heavily affected by tariffs. Excluding this impact, Milwaukee's full-year revenue growth would have been 10.3%. With production optimization completed by the end of 2025, future tariff impacts are expected to be minimal. Supported by a recovering real estate market and strong demand from AI infrastructure projects, Milwaukee is poised for robust growth in the coming years. The annual report noted that a significant portion of Milwaukee's sales comes from high-growth areas, including data centers and large-scale infrastructure projects with long investment cycles, as well as maintenance and repair demand across various industries, which substantially exceeds that of traditional residential construction.
The consumer brand Ryobi saw revenue increase by 5.4%, with power tools registering high-single-digit growth and outdoor power equipment (OPE) achieving low-single-digit growth. Non-core business revenue declined by 20.4% in 2025, accounting for 9.1% of total revenue, due to the exit from the Hart business and rationalization of the floor care segment, which decreased by 9.7%.
Regionally, North American revenue grew 3.3%, European revenue increased 13.2%, and revenue from other regions fell 2.5%. The company guidance for 2026 targets mid-to-high single-digit growth for its core business and expresses confidence in achieving a 10% EBIT margin by 2027.
Business structure optimization continued to enhance profitability. The overall gross margin for 2025 reached 41.2%, an improvement of 0.91 percentage points, driven by a higher contribution from the high-margin Milwaukee brand and effective cost control. Operating expense ratios remained stable, with selling, general and administrative, and R&D expense ratios at 17.8%, 9.8%, and 5.0%, respectively, changing by +0.7, -0.4, and +0.5 percentage points year-on-year. The increase in R&D spending was mainly due to new product development and strategic investments. Consequently, the net profit margin attributable to shareholders for 2025 was 7.9%, up 0.2 percentage points.
Key risks include fluctuations in the RMB exchange rate, share sales by major shareholders, and the lifting of restrictions on locked-up shares.
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