The company released 2024 Q3 TV shipment data:

Global shipments of 24Q3 TCL TVs were 7.49 million units (+19.7% YoY); Q1-3 global shipments were 20.01 million units (+12.9% YoY), while global shipments of Miniled TVs were +163%, which boosted ASP.

Q3 Shipments continued to exceed expectations.

Structural trends: We split Q3 domestic and foreign shipments +5%/+24% domestic sales: We expect Q3 shipments to be about +5% at the same rate as H1, and the expected revenue growth rate is higher than shipments. Mainly due to ASP benefiting from the high-end MiniLED trend, Q1-3 Miniled's domestic sales volume was +181% year-on-year, accounting for a significant increase of 6.9pct. The TCL+ Thunderbird brand increased their share, and the Q1-3 domestic sales Thunderbird/overall shipment growth rate was +47%/+5% better than the industry, respectively.

Export sales: We expect Q3 shipments to be about +24%, continuously accelerating H1 +10% /Q2 +20% month-on-month. We expect revenue growth to also be higher under structural improvements. Refer to Q1-3 Miniled's overseas shipments +145% year-on-year.

Looking at the zoning scale, Q1-3 ranked Europe +36% > North America +8% > Emerging +6%. Growth trends in core regions drive overall export shipments +15% year-on-year. Compared with H1, the growth rate of Europe and emerging markets remained unabated, and North America welcomed an inflection point (single Q3 shipments +28% better than H 1-2.7%), confirming that early product channel adjustments had worked.

Cost trends: panel pressure is expected to ease

We monitor the average price of 24Q3 55-inch/65-inch panels at -2%/+1%, and the sharp price increase from H1 +27%/26% has stabilized; previously, 24H1 gross margin-2pct was suppressed by panel price increases as the core, along with improved costs and continuous improvement in ASP, which is beneficial to the increase in gross profit, compounded by continued internal fee cuts within the company, and profitability is expected to rise to the next level.

Investment advice: maintain a “buy”

Our point of view:

Since the beginning of the year, the company's shipments have exceeded expectations for 3 consecutive quarters, showing the aggressive alpha of global brands; the current domestic sales trade-in policy favors the optimization of the first-line brand structure and the acceleration of Miniled penetration. The company's domestic sales brands are working together, the core export market is being expanded efficiently, and cost improvements are compounded. I am optimistic that the company's volume and price will rise rapidly and profits will improve.

Profit forecast: We raised our profit forecast. We expect 24-26 revenue to be HK$95.5/107.8/119.9 billion (previous value: HK$92.3/105.2/118.1 billion), up +21%/11% year over year; net profit to mother is HK$1.35/1.65/2 billion (previous value: HK$1.27/1.56/1.97 billion), up +81%/22%/21% year on year; current corresponding PE is 11/9/ 7X maintains a “buy” rating with a 50% dividend corresponding to a dividend rate of over 4.5%.

Risk warning

The market sentiment fell short of expectations, industry competition intensified, and panel prices fluctuated greatly.