TCL Electronics Discloses TV Shipment Volume Briefing:

24Q3: volume +20%, of which domestic sales +5%, export sales +20-25% (export sales are our estimated value); 24Q1-3: volume +13%, of which domestic sales +5% and export sales +15%.

Export sales: Significant improvements in volume and structure

Volume: High growth in Q3, mainly due to the accelerated growth in North America due to Black Friday shipments, and the quarterly growth rate in Q3 was 8%/28%.

According to industry research, TCL's North American channel inventory declined sequentially in September and is now in a normal state. The Q3 growth rate continued the H1 trend in the rest of the region.

Structure: North America's entry into high-end channels such as BestBuy is driving the accelerated growth in sales of Q3 miniled and large screens over 75 inches. We expect sales of the miniled Q3 to be +190%, the H1 will be 125%, the sales volume of the Q3 with a 75-inch or larger screen will nearly double, and the H1 will be +78%.

Domestic sales: volume growth continues in H1, and we expect Q4 to be driven by trade-in

Volume: Q3 overall +5%, better performance than the industry (-8%, Aowei caliber). We expect Thunderbird brand revenue+ double digits and TCL brand revenue to remain the same.

Structure: In Q3, the sales share of 75-inch or larger TVs in domestic sales was similar to H1, maintaining 33%. According to Aowei data, the online sales penetration rate of 24W42 black electric miniled has reached 40+%, and it is expected that Q4miniLED will drive the average price and profit margin of domestic TV.

Investment advice: The performance is highly deterministic and the dividend rate has reached 50+%, which has both growth and value. It is recommended to “buy” Q3 export sales, especially in North America, which exceeded expectations and led to a sharp rise in export sales volume and price. The company's domestic sales growth is better than the industry, and I expect an improvement in Q4 profit margins.

Looking at the medium to long term, 1) The growth in 24 years was based more on loss reduction businesses such as mobile phones. The growth in 25-26 was mainly due to an increase in TV gross profit. Domestic sales mainly relied on the penetration of miniLEDs, and export sales had more room for high-end production under the penetration of large screens and miniLEDs. 2) The company released a stock reward plan in early '24, and the performance is highly deterministic.

3) The company's dividend rate is also quite impressive. We expect to maintain a dividend rate of 50% + in the future, corresponding to a 24-25 dividend rate of about 4.6%/5.6%.

We adjusted our profit forecast based on the rewards program, and revenue for 24-26 was 95.8/104.2/110.2 billion yuan, YOY +21%/+9%/+6% (previous value was 89.8/97.7/103.4 billion yuan, YOY +14%/+9%/+6%).

Net profit to mother was 1.32/1.62/2.06 billion yuan, YOY +78%/+22%/+27%. (The previous value was 1.35/1.68/2.05 billion yuan, YOY +82%, 24%, 22%), corresponding to the 24/25/26 PE was 11/9/7X, giving a “buy rating”.

Risk warning: Increased domestic competition, increased overseas competition, continued increase in panel costs, foreign exchange fluctuations, and risks of untimely updates to research information.