Skyworth Digital's LCD TV shipment jumped 58%

But analyst sees an upcoming slack season for TV manufacturers.

Skyworth released January operational data yesterday after market closed. 

Maybank Kim Eng reports that total LCD TV shipments rose 58% YOY and 1% MOM to 1.4m units. In particular, Jan 2013 shipments of LCD TVs in China grew by 72% YOY and declined 1% MOM to 1.2m units. For the first ten months of FY3/13, Skyworth has sold a total of 10.1m units of LCD TV, implying an achievement ratio of 96%. 

Here's more:

Implication: The shipment numbers are robust but within our expectation, thanks to the Chinese New Year effect and low base last year. It is worth highlighting that the China TV ASP in Jan rose surprisingly by 8% YoY, in our view is driven by new product launches during the period.

High-end product mix (3D TV and cloud TV) improved continuously from 53% in Dec 2012 to 57% in Jan 2013. Similar to TCLM, we expect the upcoming shipments figures to be soft as this should be a slack season for the TV manufacturers. 

Action: The stock outperformed the market and rose 1.5% yesterday as the market anticipated a strong set of shipment. Skyworth is now trading at 7.5x FY3/14F PER and offering 4% forward yield. As the share price is approaching our TP of HKD5, we suggest investors to take profit on any share price strength today. Our preferred play in the sector is Haier Electronics.