Financial Associated Press, November 26 (Editor Hu Jiarong) On Tuesday morning Beijing time, Trump made a baseless claim on his social media that he would impose an additional 10% tariff on china. Certain stocks in the Hong Kong market experienced a decline, and Techtronic Ind's stock price fell more than 7% at one point. As of the time of writing, it had dropped by 2.24%, standing at 104.40 Hong Kong dollars.

In terms of news, US President-elect Trump posted on his social media account on November 25, claiming he would impose an additional 10% tariff on all imported goods from china.

Nanhua Futures previously pointed out that after Trump's election, based on the information released in his speeches, he is likely to continue the "America First" ideology and pursue trade protectionist policies, such as imposing tariffs. This will directly impact the profitability and market share of Chinese export enterprises.

According to public information, the company is a global enterprise that produces electric tools, accessories, hand tools, outdoor gardening tools, and floor care products. Electric tool products are sold under the brands MILWAUKEE, EMPIRE, AEG, RYOBI, HOMELITE, Imperial Blades, STILETTO, and Hart, or through original design manufacturers.

Techtronic Ind's main revenue comes from the North American market. According to the performance in the first half of 2024, North American revenue reached 5.46 billion dollars, while Europe accounted for 1.25 billion dollars. Other regions, including australia, latin america, and asia, recorded 0.599 billion dollars.

To cope with expectations of Trump's tax increases, Techtronic Ind has diversified its global production layout to mitigate potential tariff risks. According to Daiwa's estimates, Chinese production capacity accounts for only one-third of Techtronic Ind's overall capacity. This diversified production layout helps to reduce the risk from a single market and lessen the impact of tariffs on the company's overall operation.

How do institutions view the impact of trade tariffs on companies?

Citi Research pointed out in its research reports that due to trade fluctuations and slightly higher sales and administrative expenses, it has lowered Techtronic Ind's net income forecasts for fiscal years 2025 and 2026 by 4.4% and 3.4% respectively, and reduced its target price from 138 Hong Kong dollars to 135 Hong Kong dollars, while reiterating the "outperform market" rating.

Recent research reports from Citibank indicate that Techtronic Ind's stock price has recently been weighed down by Trump's potential increase in trade tariffs. The bank views this as a good buying opportunity, as Techtronic Ind has historically outperformed both macroeconomic and industry performance. Citibank's target price for Techtronic Ind is 140 Hong Kong dollars, with a rating of "buy."