20180605-东英亚洲证券-TCL多媒体-01070.HK-Asset_injection_plan_from_parent_on_the_way_7页_1mb
报告摘要
TCL Multimedia (1070 HK) Summary
Core Information
- Company Name: TCL Multimedia
- Stock Code: 1070 HK
- Industry: Electronic Appliance
- Market Cap: HK$9,235.76 million
- Issue Shares: 2,332.26 million
- Close Price (as of 04/06/2018): HK$3.96
- Target Price (revised): HK$5.60 (+41%)
- Prior Target Price: HK$4.60
- Major Shareholder: TCL Corp (51.83%)
- Fiscal Year: 12/2017
Key Highlights
Company Overview
- TCL Multimedia is a leading TV manufacturer with a vertically integrated business model.
- It ranks among the top 3 in the Global LCD TV market and No. 3 in the PRC.
Asset Injection Plan
- Acquired 100% of CI Tech from its parent group, TCL Corp, for RMB793 million.
- CI Tech specializes in smart IoT solutions for commercial use and has highly sticky customers in sectors like public administration, hotels, hospitals, and airports.
- The acquisition price was 9.5x 2017 earnings after tax and extraordinary items, below the industry average of 15x–25x.
- The acquisition is expected to enhance the company's revenue and profit through:
- Immediate new revenue streams from commercial IT solutions services.
- Breakthrough in the B2B market, particularly in commercial display.
- Synergy benefits from shared R&D, supply chain, manufacturing, and distribution.
Earnings Revisions
- FY18E Revenue revised up to HK$46,928 million (+1.9%).
- FY19E Revenue revised up to HK$54,514 million (+6.1%).
- FY18E Adjusted Net Profit revised up to HK$833.4 million (+7.3%).
- FY19E Adjusted Net Profit revised up to HK$1,133.6 million (+22.3%).
- Diluted EPS for FY18E and FY19E revised to HK$0.344 and HK$0.468, respectively.
Key Financial Metrics (FY18E & FY19E)
| Metric | FY18E (HK$ million) | FY19E (HK$ million) |
|---|---|---|
| Revenue | 46,928 | 54,514 |
| Gross Profit | 7,359.7 | 8,548.9 |
| Gross Margin | 15.7% | 15.7% |
| Opex | (6,699) | (7,530) |
| EBIT | 1,054 | 1,420 |
| Net Profit | 833 | 1,134 |
| Diluted EPS | 0.344 | 0.468 |
| Net Margin | 1.78% | 2.08% |
| ROE | 9.4% | 10.8% |
Key Drivers for Buy Rating
- Asset injections from the parent company, including the acquisition of CI Tech.
- Robust growth in overseas TV markets.
- Strong smart multimedia business alliances with Tencent Video and JD.com.
Risks
- ASP erosion may be faster than expected.
- Slower recovery in the PRC market.
- Exchange rate and execution risks in overseas expansion.
- Growth of B2B business may fall below expectations.
Peer Comparison (Exhibit 6)
| Company | Price (HK$) | Mkt Cap (US$m) | 3-Month Avg Turnover (US$m) | P/E | P/B | EV/EBITDA | Net Debt/Equity | Gross Margin | Net Margin | ROE |
|---|---|---|---|---|---|---|---|---|---|---|
| TCL Multimedia | 3.96 | 1,177 | 1.3 | 10.5 | 1.05 | 4.7 | Net cash | 15.4 | 2.0 | 10.7 |
| HSI | 30997.98 | - | - | 12.7 | 1.37 | - | - | - | - | 10.8 |
| HSCEI | 12249.58 | - | - | 9.2 | 1.05 | - | - | - | - | 11.3 |
| CSI300 | 3807.58 | - | - | 14.5 | 1.83 | - | - | - | - | 12.6 |
| Skyworth Digital | 3.78 | 1,475 | 6.4 | 8.5 | 0.72 | 12.5 | 51.6 | 13.1 | 2.9 | 4.8 |
| Hisense Elec-A | 14.65 | 2,992 | 26.6 | 20.3 | 1.36 | 17.4 | 0.0 | 13.1 | 2.9 | 6.9 |
| Sichuan Chang-A | 3.08 | 2,220 | 12.2 | 39.9 | 1.09 | 24.7 | 47.1 | 12.3 | 0.5 | 3.0 |
| Leshi Internet-A | 3.62 | 2,254 | 141.2 | N/A | 47.45 | -1.3 | -37.5 | -37.5 | -205.6 | -19.9 |
| TCL Corp-A | 3.1 | 6,620.5 | 47.0 | 14.4 | 1.36 | 10.1 | 47.3 | 20.1 | 2.4 | 10.8 |
| Skyworth Digit-A | 7.92 | 1,323 | 19.3 | 88.0 | 2.94 | 33.5 | 51.6 | 14.3 | 1.3 | 4.8 |
| Huayi Brothers-A | 7.36 | 3,188 | 45.0 | 24.5 | 2.06 | 52.9 | 17.7 | 45.2 | 21.1 | 12.2 |
| Netflix Inc | 359.93 | 156,459 | 3271.8 | 279.0 | 38.91 | 176.2 | 102.6 | 4.8 | 19.2 | 26.4 |
| Amazon.Com Inc | 1641.54 | 796,519 | 7839.0 | 259.7 | 25.25 | 52.4 | 47.5 | 34.5 | 14.8 | 16.3 |
Historical Recommendations and Target Price
| No. | Date | Rating | Target Price (HK$) | Close Price (HK$) |
|---|---|---|---|---|
| 1 | 25 Oct 2013 | HOLD | 3.00 | 3.24 |
| 2 | 25 Feb 2014 | HOLD | 3.50 | 3.30 |
| 3 | 25 Apr 2014 | HOLD | 3.40 | 2.86 |
| 4 | 10 Jun 2015 | BUY | 7.00 | 5.85 |
| 5 | 13 Aug 2015 | BUY | 7.20 | 4.06 |
| 6 | 14 Apr 2016 | BUY | 5.85 | 5.02 |
| 7 | 15 Aug 2016 | BUY | 6.10 | 4.32 |
| 8 | 25 Oct 2016 | BUY | 5.80 | 4.08 |
| 9 | 24 Jan 2017 | BUY | 4.14 | 3.60 |
| 10 | 22 Mar 2017 | BUY | 5.20 | 3.75 |
| 11 | 28 Apr 2017 | BUY | 5.20 | 3.85 |
| 12 | 09 Aug 2017 | BUY | 5.70 | 3.75 |
| 13 | 23 Nov 2017 | BUY | 6.40 | 4.57 |
| 14 | 06 Apr 2018 | BUY | 4.60 | 3.64 |
| 15 | 26 Apr 2018 | BUY | 4.60 | 3.59 |
| 16 | 03 May 2018 | BUY | 4.60 | 3.53 |
Key Takeaways
- The acquisition of CI Tech is a value accretion move and is expected to drive revenue and profit growth.
- The target price has been revised upward to HK$5.60, based on a 12x FY19E PE.
- The company is expected to benefit from overseas TV market growth and strategic alliances.
- Risks include potential ASP erosion, slower PRC market recovery, and execution risks in overseas expansion.
- The company's financial performance has shown improvement in profitability and margin due to the asset injection and operational synergies.
Conclusion
TCL Multimedia continues to show positive momentum with a BUY rating and revised target price. The acquisition of CI Tech is a strategic move that enhances its B2B presence and financial performance, supported by operational synergies and strong alliances. However, it faces challenges in maintaining growth and managing risks associated with market recovery and international expansion.
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