Yamato: TECHTRONIC IND (00669) raises interim earnings forecast, target price increased to HK$170.

Daiwa released a research report stating that TECHTRONIC IND (00669) demonstrated stable mid-term performance, with EBIT profit margin increasing by 86 basis points year-on-year to 9.9%, very close to the management's internal target of reaching 10% by 2027. The profit margin significantly exceeded expectations, driving a 17.5% increase in earnings for the first half of the year to $738 million, which is 3% higher than market expectations. Daiwa reiterated its "Buy" rating on Techtronic, raising the target price from HK$143 to HK$170. The report also mentioned that management revealed the first-half profit margin has not accounted for potential tax refunds, which are expected to bring one-time gains in the second half of this year. Daiwa believes that Techtronic is likely to achieve its 10% EBIT profit margin target a year ahead of schedule, reaching the target by 2026 even without the potential one-time gains from tax refunds. With the increasing share of the higher-margin Milwaukee brand and the reduction of drag from other smaller brands, Daiwa expects a high visibility for the continuous expansion of TECHTRONIC IND's profit margins from 2026 to 2028, adjusting the earnings per share forecast for 2026 to 2028 upward by 4% to 5%.