- We maintain our OUTPERFORM rating for TLG despite cutting our target price (TP) by 13%. TLG’s stock price has declined by 14% over the past nine months. We cut our 2024F/25F/26F NPAT-MI by 21%/17%/17%, respectively, mainly because we reflect weaker-than-expected demand and higher-than-expected SG&A expenses in 2023 in our forecast. Partly offsetting these factors, we roll our TP horizon from mid-2024 to end-2024.

- Per TLG, after its customers destocked during 2023, it has been observing early signs of restocking at points of sales. January 2024 sales increased 10% YoY; however, this is partly due to the 2024 Lunar New Year occurring in February instead of January in 2023.

- We expect 2024F sales to recover 13% YoY, mainly backed by sales volume and product mix improvements as TLG expects no price hikes this year.

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