JPMorgan has released a research report, placing Tecktronic Ind (00669) on its positive catalyst watchlist. The bank believes the market's valuation reassessment of the company's data center business is still in its early stages, with catalysts gradually accumulating, pointing to a key date of August 31. The report states that the market is only just beginning to price in the structural growth and margin improvement of Techtronic's AIDC business. The firm maintains its "Overweight" rating with a target price of HK$179.
The bank anticipates that the first-half 2026 financial results and management commentary will serve as a critical juncture for the market to re-evaluate the company's structural business growth and profitability. It believes the AIDC business can be translated into quantifiable segment KPIs in the future. While the market has concerns about a high base for comparison and rising operating costs, JPMorgan argues that Techtronic's phased product price increases since the second half of last year, combined with an ongoing shift towards higher-margin business segments, suggest these pressures are manageable. It forecasts first-half sales and profit of approximately $8.1 billion and $700 million, representing year-on-year growth of 4% and 10% respectively, which aligns with market expectations of 5% and 11%. Sales for the Milwaukee brand are projected to grow by about 7.5% year-on-year, while Ryobi is expected to record low single-digit growth.