China Merchants Securities' research report pointed out that TCL Electronics (01070) shipped 20.01 million units globally in the first three quarters of the year, a year-on-year increase of 12.9%. Among them, Q3 shipments reached 7.49 million units, a 19.7% year-on-year increase, with the growth rate continuing to expand compared to Q2. The company's overall overseas market shipments in the first three quarters increased by 15.2% year-on-year, further expanding from the 10.4% growth in the first half of the year. By region: 1) In the European market, shipments in the first three quarters increased by 35.5% year-on-year, continuing the high-growth trend since the second quarter. They were among the top three in countries and regions such as France, Sweden, Poland, Spain, Greece, and the Czech Republic. 2) In the North American market, benefiting from channel switching, mid-to-high-end strategies, and precise marketing strategies, the company's Q3 shipments increased by 27.5% year-on-year, quickly reversing the previous downward trend. 3) In emerging markets, shipments in the first three quarters increased by 6.0% year-on-year, with Latin America and the Middle East and Africa markets seeing shipment increases of 12.1% and 22.7% respectively, driven by channel expansion.

The bank continued to point out that MiniLED has become the mainstream technology upgrade in the television industry this year. With strong push from the supply side, increased awareness from the demand side, and national subsidies, the penetration rate has continued to exceed market expectations. According to data from Aowei Yunnetwork channel detection, during the 2024 Singles' Day period, the penetration rates of online market sales volume/sales revenue of MiniLED TVs are as high as 27.4% and 28.9% respectively, compared to only 2.5% and 7.2% during the same period last year. As a leader in domestic MiniLED technology, TCL has greatly benefited from this technological revolution, with domestic shipments of MiniLED TVs increasing by 181.1% year-on-year in the first three quarters, and the shipment share increasing by a significant 6.9 percentage points to 11.0% year-on-year (corresponding to approximately 0.48 million units based on the bank's calculations).

The bank predicts that the company's net income attributable to the parent from 2024 to 2026 will be 1.4/1.7/2.1 billion Hong Kong dollars, with year-on-year increases of 82%, 25%, and 25% respectively. The corresponding P/E ratios are 10.7 times, 8.6 times, and 6.9 times. They maintain a 'strong buy' investment rating.