Citi Research Reveals Exporter Preference Ranking: TECHTRONIC IND, SHENZHOU INTL, STELLA HOLDINGS

The analyst rating for TECHTRONIC IND (00669.HK) is maintained at "Buy" by HSBC Global Research due to several reasons: 1. Solid Interim Outlook: Despite short-term pressures, the company's interim outlook is considered solid, with forecasts indicating a compound annual growth rate (CAGR) of 7% for revenue and 14% for earnings per share (EPS) from 2024 to 2027. 2. Strong Sell-Through and Restocking Demand: The broker believes that TECHTRONIC IND's sell-through remains strong, and there is expected restocking demand that should enhance growth performance in 2026. 3. Market Share Gains: HSBC Global Research is optimistic that TECHTRONIC IND will continue to gain market share even in an uncertain trade environment. 4. Potential Margin Expansion: There is an expectation that margin expansion may accelerate starting next year, which could positively impact the company's financial performance. Although the target price was trimmed from $112 to $108 and short-term challenges were acknowledged, the overall outlook remains positive, justifying the "Buy" rating.

The analyst rating for TECHTRONIC IND was retained as "Overweight" due to the resilience demonstrated in both the professional and retail product markets, despite potential short-term weaknesses in U.S. consumer data amid macro uncertainties. The demand in the industry was perceived to be much stronger than some brokers had anticipated, with no apparent signs of deterioration at present. Additionally, JP Morgan's earnings forecast for the company remained several percentage points above the street consensus, leading to a slight increase in the target price from HKD135 to HKD136.