SEHK:1070

Stock Analysis Report

Executive Summary

TCL Electronics Holdings Limited, an investment holding company, manufactures, distributes, and sells color television sets in the People’s Republic of China, Europe, North America, and internationally.

Rewards

Trading at 80.8% below its fair value

Revenue is forecast to grow 11.62% per year

Earnings grew by 141.4% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -17.2% per year for the next 3 years

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet, undervalued and pays a dividend.

Share Price & News

How has TCL Electronics Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1070's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.6%

1070

9.6%

HK Consumer Durables

7.4%

HK Market


1 Year Return

-26.8%

1070

-23.1%

HK Consumer Durables

-22.7%

HK Market

Return vs Industry: 1070 underperformed the Hong Kong Consumer Durables industry which returned -23.1% over the past year.

Return vs Market: 1070 underperformed the Hong Kong Market which returned -22.7% over the past year.


Shareholder returns

1070IndustryMarket
7 Day0.6%9.6%7.4%
30 Day-25.1%-15.3%-11.2%
90 Day-11.2%-20.4%-17.3%
1 Year-22.6%-26.8%-21.6%-23.1%-19.9%-22.7%
3 Year-9.0%-22.1%-17.7%-22.9%-5.3%-14.8%
5 Year-41.8%-50.6%-19.2%-27.9%-8.7%-23.4%

Price Volatility Vs. Market

How volatile is TCL Electronics Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TCL Electronics Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1070 (HK$3.25) is trading below our estimate of fair value (HK$16.95)

Significantly Below Fair Value: 1070 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1070 is good value based on its PE Ratio (3.2x) compared to the Consumer Durables industry average (10.5x).

PE vs Market: 1070 is good value based on its PE Ratio (3.2x) compared to the Hong Kong market (8.9x).


Price to Earnings Growth Ratio

PEG Ratio: 1070's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 1070 is good value based on its PB Ratio (0.7x) compared to the HK Consumer Durables industry average (0.7x).


Next Steps

Future Growth

How is TCL Electronics Holdings forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

-17.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1070's earnings are forecast to decline over the next 3 years (-17.2% per year).

Earnings vs Market: 1070's earnings are forecast to decline over the next 3 years (-17.2% per year).

High Growth Earnings: 1070's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 1070's revenue (11.6% per year) is forecast to grow faster than the Hong Kong market (10% per year).

High Growth Revenue: 1070's revenue (11.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1070's Return on Equity is forecast to be low in 3 years time (12.6%).


Next Steps

Past Performance

How has TCL Electronics Holdings performed over the past 5 years?

56.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1070 has high quality earnings.

Growing Profit Margin: 1070's current net profit margins (4.9%) are higher than last year (2.1%).


Past Earnings Growth Analysis

Earnings Trend: 1070's earnings have grown significantly by 56.7% per year over the past 5 years.

Accelerating Growth: 1070's earnings growth over the past year (141.4%) exceeds its 5-year average (56.7% per year).

Earnings vs Industry: 1070 earnings growth over the past year (141.4%) exceeded the Consumer Durables industry 5.9%.


Return on Equity

High ROE: 1070's Return on Equity (19.5%) is considered low.


Next Steps

Financial Health

How is TCL Electronics Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1070's short term assets (HK$27.6B) exceed its short term liabilities (HK$21.2B).

Long Term Liabilities: 1070's short term assets (HK$27.6B) exceed its long term liabilities (HK$229.9M).


Debt to Equity History and Analysis

Debt Level: 1070's debt to equity ratio (14.6%) is considered satisfactory.

Reducing Debt: 1070's debt to equity ratio has reduced from 87.5% to 14.6% over the past 5 years.

Debt Coverage: 1070's debt is well covered by operating cash flow (145%).

Interest Coverage: 1070's interest payments on its debt are well covered by EBIT (19.3x coverage).


Balance Sheet

Inventory Level: 1070 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1070's debt is covered by short term assets (assets are 15.9x debt).


Next Steps

Dividend

What is TCL Electronics Holdings's current dividend yield, its reliability and sustainability?

6.51%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 1070's dividend (6.51%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.63%).

High Dividend: 1070's dividend (6.51%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.28%).


Stability and Growth of Payments

Stable Dividend: 1070's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1070's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.1%), 1070's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1070's dividends in 3 years are forecast to be well covered by earnings (44.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average board tenure


CEO

Kevin Wang (45yo)

2.42s

Tenure

HK$8,725,000

Compensation

Mr. Cheng Wang, also known as Kevin, serves as Senior Vice President of TCL Corp. He has been the Chief Executive Officer of TCL Multimedia Technology Holdings Limited since October 1, 2017 and has been i ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD1.13M) is above average for companies of similar size in the Hong Kong market ($USD480.55K).

Compensation vs Earnings: Kevin's compensation has increased by more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Dong Li
Founder & Chairman2yrsHK$4.73m2.49% HK$188.8m
Cheng Wang
CEO, COO & Executive Director2.42yrsHK$8.73m0.11% HK$8.4m
Xiaolin Yan
CTO & Executive Director6.58yrsHK$782.00k0.014% HK$1.1m
Lihua Hu
CFO & Executive Directorno datano datano data
Siu Ki Lau
Independent Non-Executive Director2.25yrsHK$567.00k0.0025% HK$191.1k
Albert Thomas da Rosa
Non Executive Director20.25yrsHK$391.00k0.0049% HK$370.2k
Robert Maarten Westerhof
Independent Non Executive Director13.42yrsHK$466.00k0.0026% HK$199.5k
Shieng-Chang Tseng
Independent Non-Executive Director8.67yrsno datano data
Yijiang Wang
Independent Non-Executive Director4yrsHK$466.00k0.0025% HK$188.1k
Yuhao Li
Non-Executive Director1.58yrsHK$80.00k0.0010% HK$76.6k

4.0yrs

Average Tenure

61.5yo

Average Age

Experienced Board: 1070's board of directors are considered experienced (4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.8%.


Top Shareholders

Company Information

TCL Electronics Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TCL Electronics Holdings Limited
  • Ticker: 1070
  • Exchange: SEHK
  • Founded: 1981
  • Industry: Consumer Electronics
  • Sector: Consumer Durables
  • Market Cap: HK$7.585b
  • Shares outstanding: 2.37b
  • Website: https://electronics.tcl.com

Number of Employees


Location

  • TCL Electronics Holdings Limited
  • TCL Electronics Holdings Limited Building
  • 9th Floor
  • Shenzhen
  • Guangdong Province
  • 518067
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TCLH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 1999
1070SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDNov 1999
TC2ADB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 1999
1070SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDNov 1999
1070SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDNov 1999

Biography

TCL Electronics Holdings Limited, an investment holding company, manufactures, distributes, and sells color television sets in the People’s Republic of China, Europe, North America, and internationally. It operates through Television, Smart AV, Smart Home Products, and Others segments. The company offers 3D and LED TVs, and accessories; BD and DVD players, dockings, and sound bars; and smart home solutions and products. It is also involved in the information technology, Internet service, and other businesses, including the manufacture and sale of television related components; and the sale of white goods, mobile phones, and air conditioners. The company was formerly known as TCL Multimedia Technology Holdings Limited and changed its name to TCL Electronics Holdings Limited in June 2018. The company was founded in 1981 and is headquartered in Shenzhen, the People’s Republic of China. TCL Electronics Holdings Limited is a subsidiary of T.C.L. Industries Holdings (H.K.) Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 12:39
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.