Company Update, 24 October 2014
TCL Multimedia Technology (1070 HK)
Technology - Hardware & Equipment
Market Cap: USD450m
Sell (Maintained)
Target Price:
Price:
HKD1.90
HKD2.62
Macro
Risks
A Disappointing Recovery
Growth
Value
TCL Multimedia Technology (1070 HK)
Price Close
Relative to Hang Seng Index (RHS)
4.10
128
3.90
121
3.70
115
3.50
108
3.30
101
3.10
95
2.90
88
2.70
81
2.50
75
2.30
25
68

15
Aug-14
Jun-14
Apr-14
Feb-14
Dec-13
Oct-13
Vol m

5
Source: Bloomberg
Avg Turnover (HKD/USD)
Cons. Upside (%)
Upside (%)
52-wk Price low/high (HKD)
Free float (%)
Share outstanding (m)
Shareholders (%)
5.62m/0.72m
23.7
-27.5
2.50 - 3.93
38
1,334
TCL Corporation
61.9
Share Performance (%)
YTD
1m
3m
6m
12m
Absolute
(27.2)
(10.6)
(8.7)
(12.7)
(23.0)
Relative
(27.6)
(8.8)
(6.3)
(16.7)
(24.8)

Worse-than-expected 3Q14 results. TCL Multimedia’s (TCL) recurring
earnings of HKD59m for 3Q14 missed our forecast by 52% mainly on:
i) 21% revenue miss, ii) lower-than-expected other income (mostly
government grants) and iii) higher-than-expected tax rates. Its GPM of
17.2% was in line with our 17.0% forecast while opex to sales was
0.2ppt higher than expected. While inventory turnover improved YoY in
3Q14 to 60 days from 72 days, its accounts payable turnover fell to 183
days from 206 days. TCL turned into a net debt with 15% net gearing vs
net cash in 2Q14. Its recurring EPS in 3Q14 was HKD0.044.
Headwinds in TV market share & smart TV platform. In contrast to
Skyworth’s (751 HK, BUY, TP: HK4.70) 10% YoY growth in China TV
shipments in Jul-Sep 2014, TCL’s 3Q14 China TV shipments have fallen
11% YoY. Note that both companies suffered large ASP declines YoY in
3Q14. TCL’s loss of market share is alarming because, even given the
low base of 3Q13 (due to the expiry of the energy saving subsidy), it has
not managed to grow. Also, despite efforts to grow its smart TV platform,
its active user base dipped 1% MoM to 1.3m in Sep 2014. While it is too
early to say if its TV platform has failed to uphold user interest,
management should carefully monitor its smart TV platform strategy.
TP lowered to HKD1.90 (from HKD2.40), maintain SELL. We cut our
FY14F-16F recurring net profit by 27%/22%/26%, mainly on lower
revenue forecasts. We lower our TP to HKD1.90, based on the same 7x
FY15F P/E, which is at a discount to 8x target FY15F (Mar) P/E for
Skyworth. We continue to prefer Skyworth due to its solid TV hardware
business with better margins (see Figure 6). We are negative on TCL as
its bread-and-butter TV hardware business is losing market share to its
peers while its smart TV platform faces uncertain growth prospects.
Forecasts and Valuations
Dec-12
Dec-13
Total turnover (HKDm)
36,025
39,495
33,199
34,523
35,405
Reported net profit (HKDm)
911
(48)
342
359
445
Recurring net profit (HKDm)
734
(236)
209
359
445
189.8
(132.1)
71.7
24.0
Recurring EPS (HKD)
0.56
(0.18)
0.16
0.27
0.33
DPS (HKD)
0.25
0.29
0.08
0.08
0.10
16.8
9.8
7.9
0.80
0.77
0.73
0.68
5.9
Recurring net profit growth (%)
Shariah compliant
Christopher Tse +852 2103 9415
Recurring P/E (x)
[email protected]
P/B (x)
4.7
0.72
na
Dec-14F Dec-15F Dec-16F
na
P/CF (x)
7.6
6.1
10.9
19.7
Kong Yong Ng 852 2103 5844
Dividend Yield (%)
9.6
11.1
2.9
3.1
3.8
[email protected]
EV/EBITDA (x)
3.8
29.1
14.4
7.6
8.9
Return on average equity (%)
Net debt to equity (%)
Our vs consensus EPS (adjusted) (%)
22.0
na
(1.1)
na
7.6
net cash net cash net cash net cash net cash
(34.7)
(11.9)
(8.8)
Source: Company data, RHB
See important disclosures at the end of this report


2

.
3
0
.
2
0
0
.
2
0
0
TCL’s 3Q14 recurring earnings missed our estimate by 52% even .
0
though it was an improvement over 2Q14. We are also concerned about 0
its 3Q shipments, which fell 11% despite last year’s low base, while its 0
smart TV platform saw a decrease in active users in Sep 2014 despite
the company’s transition efforts. Overall, we slash our FY14F-16F
numbers by 22-27% and cut our TP to HKD1.90 (from HKD2.40),
implying a 27.7% downside based on 7x FY15F P/E. Maintain SELL.
20
10




Powered by EFATM Platform
1
TCL Multimedia Technology (1070 HK)
24 October 2014
Figure 1: Quarterly results
FYE Dec
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Operating data
3Q14
QoQ
YoY
Actual
3Q14F
Diff
Forecast
Total TV shipment
PRC
2.54
2.02
2.49
2.89
1.80
1.76
2.22
26.7%
-10.6%
2.91
-23.5%
Overseas
1.72
2.22
2.44
1.94
2.04
2.07
2.16
4.5%
-11.3%
2.38
-9.2%
PRC
2,636
2,718
2,487
2,534
2,414
2,414
2,336
-3.2%
-6.0%
2,430
-3.9%
Overseas
1,489
1,347
1,271
1,672
1,460
1,460
1,462
0.1%
15.0%
1,480
-1.2%
19.8%
18.9%
15.8%
14.1%
16.7%
24.0%
21.8%
-2.2 ppt
+6.0 ppt
20.0%
+1.8 ppt
8.5%
7.5%
9.5%
8.5%
10.3%
11.2%
10.3%
-0.9 ppt
+0.8 ppt
11.0%
-0.7 ppt
TV
9,244
8,463
9,289
10,553
7,329
7,261
8,357
15.1%
-10.0%
10,592
-21.1%
PRC
6,683
5,479
6,190
7,314
4,348
4,239
5,197
22.6%
-16.0%
7,069
-26.5%
Overseas
2,561
2,985
3,099
3,239
2,982
3,022
3,161
4.6%
2.0%
3,523
-10.3%
140
229
521
1,054
559
53
41
Total TV ASP
GPM
PRC
Overseas
P&L (HKDm)
Revenue
Others
Total revenue
9,385
8,693
9,810
11,607
7,889
7,314
8,398
Cost of revenue
(7,837)
(7,400)
(8,551)
(10,293)
(6,863)
(5,958)
(6,950)
Gross profit
GPM
Total opex
Opex / sales ratio
Operating profit
OPM
Other income / expenses
53
14.8%
-14.4%
10,645
1,547
1,293
1,260
1,314
1,026
1,356
1,448
6.8%
15.0%
1,811
-20.0%
16.5%
14.9%
12.8%
11.3%
13.0%
18.5%
17.2%
-1.3 ppt
+4.4 ppt
17.0%
+0.2 ppt
(1,365)
(1,425)
(1,541)
(1,722)
(1,076)
(1,404)
(1,427)
-14.5%
-16.4%
-15.7%
-14.8%
-13.6%
-19.2%
-17.0%
+2.2 ppt
-1.3 ppt
-16.8%
(1,788)
-0.2 ppt
182
(132)
(281)
(408)
(51)
(47)
21
n.a
n.a
23
-8.2%
1.9%
-1.5%
-2.9%
-3.5%
-0.6%
-0.6%
0.3%
0.2%
68
153
123
327
68
234
118
125
PBT
251
21
(158)
(81)
18
186
139
148
Income tax
(77)
0
8
(87)
(6)
(30)
(68)
(24)
30.8%
-0.9%
5.0%
-107.2%
33.0%
16.2%
49.0%
16.0%
(2)
(12)
Effective tax rate
MI
Discontinued operations
-21.1%
(8,834)
(13)
(5)
(4)
35
42
12
8
-
3
-
-
(2)
-
Net profit - reported
186
59
(142)
(160)
15
154
59
NPM - reported
2.0%
0.7%
-1.4%
-1.4%
0.2%
2.1%
0.7%
-61.9%
n.a
122
-52.1%
1.1%
Net profit - recurring
195
59
(142)
(347)
15
21
59
NPM - recurring
2.1%
0.7%
-1.4%
-3.0%
0.2%
0.3%
0.7%
185.3%
n.a
122
-52.1%
EPS - reported
0.147
0.044
(0.107)
(0.120)
0.011
0.116
0.044
-61.9%
n.a
0.092
-51.7%
EPS - recurring
0.147
0.044
(0.107)
(0.261)
0.011
0.016
0.044
185.2%
n.a
0.092
-51.7%
1.1%
Source: Company data, RHB
See important disclosures at the end of this report
2
TCL Multimedia Technology (1070 HK)
24 October 2014
Figure 2: Changes to our forecasts
FYE 31 Dec
FY14F
FY15F
FY16F
Original
New
Chg.
Original
New
Chg.
Original
New
Chg.
PRC
9.7
8.5
-12.6%
9.9
8.7
-12.6%
10.0
8.8
-12.6%
Overseas
8.7
8.5
-1.9%
9.1
9.2
0.9%
9.5
9.7
2.8%
18.2
17.0
-6.8%
19.0
17.8
-6.2%
19.5
18.5
-5.1%
PRC
2,431
2,364
-2.8%
2,431
2,340
-3.7%
2,407
2,317
-3.8%
Overseas
1,476
1,460
-1.0%
1,461
1,475
1.0%
1,461
1,482
1.5%
Average
1,998
1,912
-4.3%
1,967
1,895
-3.6%
1,947
1,878
-3.6%
TV
36,440
32,505
-10.8%
37,420
33,829
-9.6%
37,952
34,711
-8.5%
PRC
23,651
20,092
-15.0%
24,124
20,289
-15.9%
24,124
20,287
-15.9%
Overseas
12,790
12,413
-2.9%
13,296
13,540
1.8%
13,828
14,424
4.3%
719
695
-3.4%
719
695
-3.4%
719
695
-3.4%
Total revenue
37,160
33,199
-10.7%
38,139
34,523
-9.5%
38,671
35,405
-8.4%
Cost of revenue
-10.9%
(31,922)
(28,915)
-9.4%
(32,368)
(29,730)
-8.1%
6,217
5,608
-9.8%
6,303
5,676
-10.0%
TV Shipments (million units)
Total
TV ASP (HKD)
P&L (HKDm)
Others
(31,113)
(27,731)
Gross profit
6,046
5,469
Gross profit margin
16.3%
16.5%
16.3%
16.2%
16.3%
16.0%
Selling expenses
(4,355)
(4,018)
(4,386)
(3,970)
(4,370)
(4,001)
Admin expenses
(1,088)
(1,032)
(1,030)
(967)
(1,005)
(921)
R&D
(608)
(428)
(572)
(518)
(541)
(496)
Other
(50)
(51)
(52)
(53)
(52)
(54)
-16.4%
-16.7%
-15.8%
-16.0%
-15.4%
-15.5%
OPEX as % of revenue
Operating profit
Operating profit margin
(55)
(61)
-0.1%
-0.2%
-9.6%
11.3%
177
100
0.5%
0.3%
-43.5%
334
204
0.9%
0.6%
Other income
868
763
687
621
696
637
Finance costs
(231)
(197)
(237)
(205)
(240)
(210)
JC entities
(5)
(17)
(5)
(17)
(5)
(17)
Associates
(70)
0
(70)
0
(70)
Derivative gain (losses)
-
PBT
Income tax
Effective tax rate
MI
Net profit - reported
NPM - reported
Net profit - recurring
NPM - recurring
-
-
-
488.7
552.1
500.4
715.5
615.0
-85
-130
(88)
(125)
(114)
(154)
-17%
-27%
-16%
-25%
-16%
-25%
-4
-16
-4
-16
-4
342
1.1%
1.0%
286
209
0.8%
0.6%
-18.4%
-27.0%
460
359
1.2%
1.0%
460
359
1.2%
1.0%
-9.4%
0
-
508.1
419
-3.8%
-
-22.0%
-22.0%
-38.9%
-14.0%
-16
597
445
1.5%
1.3%
597
445
1.5%
1.3%
-25.5%
-25.5%
Source: RHB
See important disclosures at the end of this report
3
TCL Multimedia Technology (1070 HK)
24 October 2014
Figure 3: Detailed P&L
31 Dec YE (HKD m)
FY12
FY13
FY14F
FY15F
FY16F
Revenue
TV
35,086
37,550
32,505
33,829
34,711
PRC
23,146
25,666
20,092
20,289
20,287
Overseas
11,939
11,884
12,413
13,540
14,424
939
1,945
695
695
695
36,025
39,495
33,199
34,523
35,405
Others
Total revenue
YoY
Cost of revenue
Gross profit
9.4%
9.6%
-15.9%
4.0%
2.6%
(29,880)
(34,081)
(27,731)
(28,915)
(29,730)
5,676
6,145
5,414
5,469
5,608
YoY
16.2%
-11.9%
1.0%
2.5%
1.2%
Gross profit margin
17.1%
13.7%
16.5%
16.2%
16.0%
Selling expenses
(4,221)
(4,539)
(4,018)
(3,970)
(4,001)
Admin expenses
(951)
(1,061)
(1,032)
(967)
(921)
R&D
(336)
(425)
(428)
(518)
(496)
Other
(51)
(28)
(51)
(53)
(54)
-15.4%
-15.3%
-16.7%
-16.0%
-15.5%
opex / sales %
Operating profit
YoY
Operating profit margin
586
(638)
(61)
100
204
95.3%
-208.9%
-90.5%
-265.0%
103.8%
1.6%
-1.6%
-0.2%
0.3%
0.6%
Other income
586
890
763
621
637
Non-core
189
188
159
0
(275)
(186)
(197)
(205)
(210)
Finance costs
0
JC entities
4
(2)
(17)
(17)
(17)
Associates
(18)
(31)
0
0
0
0
0
0
0
0
883
33
489
500
615
Derivative gain (losses)
PBT
Income tax
Effective tax rate
(57)
(156)
(130)
(125)
(154)
6.5%
472.2%
26.6%
25.0%
25.0%
MI
(11)
(14)
(16)
(16)
(16)
Net profit - excluding Tonly
816
(137)
342
359
445
Discontinued operations
Net profit - reported
YoY
95
89
0
0
0
911
(48)
342
359
445
101.3%
-105.3%
-811.6%
4.9%
24.0%
Net profit margin
2.5%
-0.1%
1.0%
1.0%
1.3%
Net profit - recurring
734
(236)
209
359
445
189.8%
-132.1%
-188.6%
71.7%
24.0%
2.0%
-0.6%
0.6%
1.0%
1.3%
YoY
Net profit - recurring
Source: Company data, RHB
Figure 4: Annual LCD TV shipments
Shipment (million units)
FY12
FY13
FY14F
FY15F
FY16F
PRC
8.9
9.9
8.5
8.7
8.8
Overseas
6.7
7.3
8.5
9.2
9.7
15.5
17.2
17.0
17.8
18.5
PRC
34.1%
11.9%
-14.2%
2.0%
1.0%
Overseas
56.8%
9.1%
16.8%
8.0%
6.0%
Total
43.0%
10.7%
-1.1%
5.0%
3.6%
Total
YoY growth
Source: Company data, RHB
See important disclosures at the end of this report
4
TCL Multimedia Technology (1070 HK)
24 October 2014
Figure 5: Peer comparison
Company
Ticker
Price Mkt cap
(USDm)
3-mth P/E FY13 P/E FY14 P/E FY15
avg t/o
(x)
(x)
(x)
(USDm)
0.8
(14.8)
16.8
9.8
Tcl Multimedia T
1070 HK
2.62
450
N/A
11.1
2.9
0.7
Skyworth Digital
751 HK*
4.15
1,518
4.1
8.7
7.0
6.1
23.8
14.9
6.3
1.1
3.6
4.7
1.0
Haier Electronic
1169 HK
20.30
7,026
8.4
20.0
17.6
14.5
13.4
21.3
16.6
0.9
0.5
0.6
4.2
14.4
12.3
10.3
18.6
18.1
11.5
1.0
2.1
2.7
2.6
1.3
Average (HK-listed)
EPS
FY14 yo-y
N/A
EPS 3-Yr EPS
FY15 yCAGR
o-y
(%)
71.7
N/A
PEG (x)
Div yld Div yld
P/BV
FY13 (%) FY14 (%) FY14 (x)
China-listed peers
Hisense Elec-A
600060 CH
11.03
2,358
67.6
9.1
9.7
9.7
(6.4)
9.4
4.3
2.0
3.3
2.1
Sichuan Chang-A
600839 CH
4.33
3,266
52.7
39.4
216.5
216.5
(81.8)
465.0
17.8
n.a.
0.5
0.2
1.4
Konka Group-A
000016 CH
5.13
833
14.6
136.8
N/A
N/A
N/A
N/A
n.a.
0.2
N/A
N/A
61.8
113.1
113.1
237.2
11.1
2.0
1.3
1.1
1.4
Average (China-listed)
N/A
(44.1)
Source: Company data, RHB
Figure 6: Margin comparisons
Rev
FY13
(USDm)
Rev
FY14
(USDm)
Rev
Gross
Gross
Gross
Net
Net
Net
FY15
NP FY13 NP FY14 NP FY15 margin margin margin margin margin margin
(USDm) (USDm) (USDm) (USDm) FY13 (%) FY14 (%) FY15 (%) FY13 (%) FY14 (%) FY15 (%)
Symbol
HK-listed
Company
1070 HK
TCL MULTIMEDIA T
5090
4223
4394
-30
27
47
13.7
16.4
16.2
-0.6
0.6
1.1
751 HK
SKYWORTH DIGITAL
5,088
5,823
6,378
172
213
245
19.3
19.8
19.8
3.4
3.7
3.8
1169 HK
HAIER ELECTRONIC
10,174
11,563
13,209
333
400
482
14.7
14.6
14.6
3.3
3.5
3.7
15.9
16.9
16.9
2.0
2.6
2.9
5.0
Average
China-listed
600060 CH
HISENSE ELEC-A
4637
4733
5195
259
235
258
17.6
17.2
17.3
5.6
5.0
600839 CH
SICHUAN CHANG-A
9541
9684
10367
84
-31
64
15.9
14.7
15.5
0.9
-0.3
0.6
000016 CH
KONKA GROUP-A
3258
N/A
N/A
7
N/A
N/A
16.4
N/A
N/A
0.2
N/A
N/A
16.6
16.0
16.4
2.2
2.3
2.8
Average
Source: Bloomberg, RHB
See important disclosures at the end of this report
5
TCL Multimedia Technology (1070 HK)
24 October 2014
Financial Exhibits
Profit & Loss (HKDm)
Dec-12
Dec-13
Dec-14F
Dec-15F
Total turnover
36,025
39,495
33,199
34,523
35,405
Cost of sales
(29,880)
(34,081)
(27,731)
(28,915)
(29,730)
Gross profit
6,145
5,608
5,676
Gen & admin expenses
Selling expenses
Other operating costs
Dec-16F
5,414
5,469
(951)
(1,061)
(1,032)
(967)
(921)
(4,221)
(4,539)
(4,018)
(3,970)
(4,001)
(387)
(452)
(479)
(571)
(550)
Operating profit
586
(638)
(61)
100
204
Operating EBITDA
586
(638)
(61)
100
204
Operating EBIT
586
(638)
(61)
100
204
Net income from investments
(14)
(33)
(16)
(16)
(16)
Other recurring income
397
702
604
621
637
(275)
(186)
(197)
(205)
(210)
189
188
159
-
95
89
-
-
-
Pre-tax profit
979
122
489
500
615
Taxation
(57)
(156)
(130)
(125)
(154)
Minority interests
(11)
(14)
(16)
(16)
(16)
Profit after tax & minorities
911
(48)
342
359
445
Reported net profit
911
(48)
342
359
445
Recurring net profit
734
(236)
209
359
445
Interest income
Exceptional income - net
Other non-recurring income
-
Source: Company data, RHB
Cash flow (HKDm)
Operating profit
Change in working capital
Other operating cash flow
Operating cash flow
Interest received
Tax paid
Cash flow from operations
Capex
Other new investments
Other investing cash flow
Cash flow from investing activities
Proceeds from issue of shares
Increase in debt
Other financing cash flow
Cash flow from financing activities
Cash at beginning of period
Total cash generated
Implied cash at end of period
Dec-12
Dec-14F
Dec-15F
Dec-16F
586
(638)
(61)
100
204
(432)
538
(166)
(321)
(23)
853
723
770
561
Dec-13
1,092
715
992
626
502
952
(275)
(186)
(197)
(205)
(210)
12
(235)
(107)
(118)
(149)
452
571
323
179
592
76
(300)
(300)
(300)
(1,142)
0
0
(32)
(361)
(1,174)
(284)
249
(325)
13
(1,008)
354
(508)
278
(1,503)
4,708
(444)
4,264
4,264
(1,216)
3,048
-
-
-
-
(300)
-
(300)
-
(300)
-
322
93
62
(413)
(248)
(309)
(92)
3,048
(69)
2,979
(156)
2,979
(277)
2,702
(247)
2,702
45
2,747
Source: Company data, RHB
See important disclosures at the end of this report
6
TCL Multimedia Technology (1070 HK)
24 October 2014
Financial Exhibits
Balance Sheet (HKDm)
Dec-12
Dec-13
Dec-14F
Dec-15F
Dec-16F
Total cash and equivalents
4,264
3,048
2,979
2,702
2,747
Inventories
6,732
4,972
4,160
4,337
4,459
Accounts receivable
4,338
3,797
3,320
3,452
3,541
Other current assets
9,614
7,109
5,840
6,072
6,226
Total current assets
24,948
18,925
16,298
16,563
16,973
Total investments
177
528
528
528
528
2,630
2,564
2,864
3,164
3,464
Intangible assets
120
120
120
120
120
Total other assets
151
18
18
18
18
3,078
3,230
3,530
3,830
4,130
Tangible fixed assets
Total non-current assets
Total assets
28,026
22,156
19,828
20,393
21,103
Short-term debt
2,608
870
1,992
2,071
2,124
Accounts payable
9,263
5,473
4,437
4,337
4,459
Other current liabilities
10,716
10,168
8,332
8,669
8,900
Total current liabilities
22,587
16,511
14,760
15,077
15,484
402
1,132
332
345
354
45
31
31
31
31
448
1,163
362
376
385
Total long-term debt
Other liabilities
Total non-current liabilities
Total liabilities
23,034
17,673
15,123
15,453
15,868
Share capital
1,321
1,334
1,334
1,334
1,334
Retained earnings reserve
3,444
3,025
3,264
3,515
3,827
Shareholders' equity
4,765
4,358
4,598
4,849
5,160
Minority interests
227
124
108
91
Other equity
-
0
0
0
Total equity
Total liabilities & equity
75
-
4,992
4,482
4,705
4,940
5,235
28,026
22,156
19,828
20,393
21,103
Dec-12
Dec-13
Dec-14F
Dec-15F
Dec-16F
9.4
9.6
(15.9)
4.0
2.6
95.3
(208.9)
(90.5)
0.0
103.8
Source: Company data, RHB
Key Ratios (HKD)
Revenue growth (%)
Operating profit growth (%)
Net profit growth (%)
101.3
(105.3)
0.0
4.9
24.0
EPS growth (%)
66.6
(105.2)
0.0
4.9
24.0
Bv per share growth (%)
11.6
(10.1)
4.4
5.5
6.4
Operating margin (%)
1.6
(1.6)
(0.2)
0.3
0.6
Net profit margin (%)
2.5
(0.1)
1.0
1.0
1.3
Return on average assets (%)
3.5
(0.2)
1.6
1.8
2.1
Return on average equity (%)
22.0
(1.1)
7.6
7.6
8.9
(25.1)
(23.3)
(13.9)
(5.8)
(5.1)
DPS
0.25
0.29
0.08
0.08
0.10
Recurrent cash flow per share
0.35
0.43
0.24
0.13
0.44
Net debt to equity (%)
Source: Company data, RHB
See important disclosures at the end of this report
7
TCL Multimedia Technology (1070 HK)
24 October 2014
SWOT Analysis
 Market leader in small- to mid-sized TVs
 Market is
becoming very
competitive and
price cuts are
becoming
common
 Established distribution channels in China and
overseas.
 Demand in
China’s TV
replacement
market
 Transition to
entertainment
and hardware
could bring in
new revenue
 A slower ramp-up in its product mix relative to peers
P/E (x) vs EPS growth
P/BV (x) vs ROAE
60
400%
40
100%
20
-200%
0
-500%
P/E (x) (lhs)
EPS growth (rhs)
Source: Company data, RHB
1
10%
1
3%
1
-5%
P/B (x) (lhs)
Jan-16
700%
18%
Jan-15
1000%
80
1
Jan-14
1300%
100
25%
Jan-13
120
1
Jan-12
1600%
Jan-16
1900%
140
Jan-15
160
Jan-14
2200%
Jan-13
2500%
180
Jan-12
200
Return on average equity (rhs)
Source: Company data, RHB
Company Profile
TCL Multimedia is China’s largest TV manufacturer by shipment. The company also supplies TV to overseas markets and currently
ranks in the top 5 globally in terms of shipment, according to DisplaySearch.
See important disclosures at the end of this report
8
TCL Multimedia Technology (1070 HK)
24 October 2014
Recommendation Chart
Price Close
2.40
2.44
2.45
3.36
4.39
8.36
7.00
8.06
5.86
Recommendations & Target Price
na
8.00
6.00
5.00
4.00
3.00
2.00
Buy
1.00
Oct-09
Neutral
Feb-11
Sell
Trading Buy
May-12
Take Prof it
Not Rated
Aug-13
Source: RHB, Bloomberg
Date
Recommendation
2014-08-15
Sell
Target Price Price
2.40
3.10
2014-04-25
Sell
2.44
2.88
2014-02-25
Sell
2.45
3.33
2014-02-13
Neutral
3.36
3.72
2013-12-06
Neutral
3.36
3.93
2013-11-04
Neutral
3.36
3.46
2013-08-19
Neutral
4.39
4.10
2013-05-20
Buy
8.36
5.48
2013-04-09
Buy
8.36
5.44
2013-03-08
Buy
8.36
5.57
Source : RHB, Bloomberg
See important disclosures at the end of this report
9
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