Goldman Sachs raises the target price for TECHTRONIC IND to HKD 128.2, optimistic about the prospects of the Milwaukee business

Goldman Sachs research report indicates that TECHTRONIC IND (00669.HK) is expected to see revenue, operating profit, and net profit grow by 4%, 6%, and 7% year-on-year in 2025, reaching USD 15.26 billion, USD 1.325 billion, and USD 1.198 billion, respectively, which is generally in line with expectations. During the same period, the gross profit margin, operating profit margin, and net profit margin are expected to be 41.2%, 8.7%, and 7.9%, with the gross profit margin in the second half of the year (42.2%) being particularly outstanding.

Management revealed that the end market mix for the Milwaukee business includes a 15% exposure to data centers. The bank expects Milwaukee business growth to reach or slightly exceed the management's guidance of 10% to 12%, supported by strong capital expenditures from U.S. cloud service providers. Meanwhile, the Ryobi (DIY) business is expected to grow slowly under generally flat housing-related factors.

The bank's latest forecast for the compound annual growth rate of revenue and earnings per share from 2026 to 2030 is 9% and 14%, respectively. The target price has been raised by 14% from the previous HKD 112.3 to HKD 128.2, maintaining a "Buy" rating