Gao Shengfa reported that the bank cut Techtronic Industries's (00669) 2022-25 revenue forecast by 5-7 per cent, mainly because the bank cut its sales forecast for DIY tools and floor care products by 5-9 per cent in 2022-2025, and the target price was lowered by 9 per cent from HK $113.5 to HK $102.9. Maintain a "buy" rating. The company's current trading price corresponds to a price-to-earnings ratio of 19 times 2023 / 2024, while the historical median is 17 times. The long-term penetration trend remains the same, but a more meaningful recovery may have to wait until 2024-2025. At the same time, the bank believes that Techtronic Industries's business performance is still better than that of similar companies.

The bank continued that its team of analysts predicted that GDP growth in the US / eurozone would be 1% / 0.1% in 2023, respectively, and that a recession might be avoided in the US, but there was still a slight risk of recession in Europe. The bank now expects revenue growth to be limited to 3% in 2023 after a lacklustre 2022, with professional tools (Milwaukee Brand) being the main driver, despite weak consumer spending.

For similar companies, bank analysts believe that Makita's earnings may fall sharply in the first half of 2023 due to the risk of sales shortages and inventory adjustments in related demand represented by power tools amid a slowdown in macroeconomic indicators related to housing construction in the United States and Europe. However, since the beginning of the fiscal year, Muda has continued to speak frankly about the risk of deterioration in the market environment and expressed its willingness to take necessary measures, including production cuts. In addition, The Home Depot Inc (Home Depot) suppliers expect inflation, uncertainty about the macro outlook and a further slowdown in housing demand to cause consumers to cut back on disposable spending. The company noted that professional demand exceeded DIY demand for the seventh consecutive quarter and stressed that inventories were up 25 per cent year-on-year.