[ET Net News Agency, 16 July 2020] HSBC Global Research lifted its target price for
Techtronic Industries (TTI)(00669) to HK$90 from HK$60 and upgraded its rating to "buy"
from "hold"
The research house said industry data now show a fast recovery. After recording a
decline of 5% for net profit for 1Q and guiding for a weak 2Q, Shenzhen Longood (Shenzhen
code: 300543), one of TTI's major suppliers (TTI accounts for 46% of its revenue) issued a
positive profit alert on 14 July with net profit up 21% for 2Q.
Meanwhile, SWK, one of the world's largest power tool makers, has also revised up its
full-year guidance to -20% from -40%. Chinese hand tool manufacturer Hangzhou Greatstar
(Shanghai code: 002444) also reported a rise of c.51% YoY in net profit for 2Q. Home
Depot, TTI's biggest distributor (47% revenue contribution in 2019), reported a similar
scenario.
Given its amateur power tool advantage, TTI is expected to outperformed its competitors
in 2Q, HSBC noted. It raised its revenue and net profit estimates for 2020 by 17.2% and
23.6%, respectively. (KL)