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　　查看PDF原文 公告日期：2016-03-24

　　TCL通讯（02618） Lower than expected 4Q15 results. TCL Communication (TCL Comm) reported its4Q15 net income of HKD288m (EPS:LOL官网登录入口 HKD0.23,lol台服官网地址 down 9% QoQ and 23% YoY),英雄联盟官网 on salesof HKD8.3bn (up 17% QoQ but down 23% YoY). 4Q15 earnings were 20%/12% belowour/consensus estimates on higher than expected R&D expenses. Higher R&D expensesmore than offset gross margin expansion. The gross margin expanded 1.7ppts QoQ to23.4% in 4Q15, higher than our and consensus estimates of 20.0% and 20.9%,respectively, thanks to new smartphone models and better than expected mix in highermargintablet and feature phones. The balance sheet looks healthy, in our view, withinventory days coming down by 3 days to 26 exiting 4Q15. Middle East, Asia Pacific and China major source of weakness. The smartphoneshipment was 13.4m units (up 18% QoQ but down 14% YoY) in 4Q15. Among allregions, China and Asia Pacific showed the sharpest decline (down 40% QoQ and 87%YoY for China, down 40% QoQ and 81% YoY for Asia Pacific). Middle East also showed11% QoQ decline in unit shipment. We believe the company has been facing competitionfrom Chinese and Taiwanese brands in the lower-end segments. Rising tablet shipments unlikely to offset weakness in smartphones. Tabletshipments doubled from 2mn units in 2014 to 4.4mn units in 2015. We expect it willcontinue to grow off the low base to 6mn units in 2016. Although tablets yield bettermargins, it is difficult to offset the slowdown in smartphone growth, as tablet shipmentsare only 10% of smartphone shipments. The contribution from higher margin serviceincome also remains to be seen, as it is still in the early stage. Valuation and risks: To reflect weaker than expected shipment owing to competition inthe open market (as opposed to carrier market), we lowered our 2016e/2017e EPSestimates by 9%/9% to HKD0.8/HKD0.8. We derive our new target price of HKD6.0(down from HKD6.6) based on an unchanged multiple of 8x and lower 2016 EPSestimate. 8x is where the stock has traded in a downcycle when earnings growth hasslowed since its IPO. Our TP implies 10% upside; we have a Hold rating. Upside risksinclude better-than-expected product mix improvement towards higher end models, whichyield 20% better ASP and better sale of higher margin tablets. Downside risks includeweaker-than-expected demand in the mid-tiered segment of smartphones, especially inthe open market where it is easier for customers to switch brands. .

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