VSTECS Holdings Limited, the Technology sector company, was revisited by a Wall Street analyst on August 22. Analyst Saiyi He from CMB International Securities maintained a Buy rating on the stock and has a HK$14.20 price target.
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Saiyi He has given his Buy rating due to a combination of factors including VSTECS Holdings Limited’s strong financial performance and strategic positioning in the market. The company reported a significant increase in total revenue by 14% year-over-year, reaching HK$45.5 billion, and a notable rise in net profit by 36% year-over-year to HK$649 million. This growth is largely driven by the robust demand for AI computing power, which has led to a 68% year-over-year surge in their cloud computing business.
Additionally, VSTECS has shown impressive revenue growth in Southeast Asia, with a 22% year-over-year increase, supported by strong government demand for digitalization. The company’s strategic partnerships with leading hyperscalers like Alibaba Cloud, Huawei Cloud, and AWS have further bolstered its cloud computing revenue. Moreover, the favorable shift in revenue mix towards higher-margin businesses has contributed to margin expansion, enhancing the company’s profitability outlook. These factors collectively underpin Saiyi He’s confidence in maintaining a Buy rating for VSTECS Holdings Limited.