- TLG released Q1 2023 earnings with revenue growing 16% YoY and NPAT declining 13% YoY, which are in line with our expectation and both achieve 24% of our respective full-year forecasts.

- We see the revenue growth in Q1 2023 as a positive signal given overall weak consumer demand and because the growth rate was higher than the pre-COVID level. Both exports and domestic sales reported mid-teen YoY growth.

- NPM compressed YoY because TLG continued to spend heavily on its sales force and marketing. This heavy spending began to be recognized in Q2 2022. SG&A expenses/revenue remained high at 29% in Q1 2023 vs 30% in 2022 and 24%-25% in 2015-2019. We forecast this metric to hit 30% in full-year 2023.

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