VTech Holdings (0303) AI Stock Analysis

• Market Cap: $13.38B
• Dividend Yield: 11.16%
• Average Volume (3M): 599.31K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.42
• Revenue Growth: -5.78%
• EPS Growth: -0.51%
• Country: HK
• Employees: 22,200
• Sector: Technology
• Sector Strength: 77
• Industry: Communication Equipment
• EPS (TTM): 2.14
• Shares Outstanding: 253,109,130
• 10 Day Avg. Volume: 605,369
• 30 Day Avg. Volume: 599,307
• PEG Ratio: -3.20
• Price to Book (P/B): 2.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.64
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $62.01
• Price Target Upside: 17.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

VTech Holdings scores well due to its strong financial performance, marked by effective cost management, stable cash flows, and conservative leverage. Its attractive valuation, with a low P/E ratio and high dividend yield, further enhances its appeal. However, technical analysis suggests mixed signals, with short-term upward momentum but long-term bearish trends, resulting in a moderate overall score.

VTech Holdings Business Overview & Revenue Model

Company Description

Vtech Holdings Limited designs, manufactures, and distributes electronic products in North America, Europe, the Asia Pacific, and internationally. The company offers electronic learning toys for infancy, toddler, and preschool under the Vtech and LeapFrog brands; platform products; and learning programs. It also provides telecommunication products, such as residential and commercial phones under the VTech; and other telecommunication products, including baby monitors, cordless handsets, and integrated access devices. In addition, the company offers contract manufacturing services for customers in the areas of professional audio equipment, hearables, Internet of Things, and medical and health products. Further, it provides property holding, and group financing and procurement services; develops broadband connectivity software; sells telecommunication and electronic products; and manufactures plastic products. The company was founded in 1976 and is headquartered in Tai Po, Hong Kong.

How the Company Makes Money

VTech makes money through a diversified revenue model across its three primary business sectors. The electronic learning products sector generates revenue by designing, manufacturing, and selling a wide range of educational toys and learning devices for children. In the telecommunications sector, VTech earns money by producing and selling cordless phones and related communication devices, often through retail partnerships and direct sales channels. The contract manufacturing services sector provides additional income by offering manufacturing solutions to various industries, including the production of electronic products for third-party companies. VTech's earnings are also bolstered by strategic partnerships and a focus on research and development, ensuring a steady pipeline of innovative products that meet market demands.

VTech Holdings Financial Statement Overview

Summary

VTech Holdings demonstrates overall financial health with strong profitability and stable cash flows. Despite recent revenue declines, the company maintains effective cost management and operational efficiency. The balance sheet's conservative leverage and strong equity position provide solid financial stability, while the impressive cash flow metrics underpin liquidity strength and sustainability.

Income Statement

VTech Holdings shows a solid gross profit margin with a recent figure of 29.6% for the latest annual period, indicating effective cost management. However, the company has experienced a decline in revenue over the past two years, with a revenue growth rate of -4.28% from the previous year. The net profit margin remains healthy at 7.8%, although it has slightly decreased from previous levels. EBIT and EBITDA margins are consistent, reflecting stable operational efficiency.

Balance Sheet

The balance sheet of VTech Holdings is robust, with a low debt-to-equity ratio of 0.25, highlighting conservative leverage and financial stability. The equity ratio is strong at 51.1%, indicating a solid asset base supported by equity. The return on equity stands at 25.8%, showing strong profitability relative to shareholder's equity, although slightly down from previous years.

Cash Flow

The company exhibits strong cash flow metrics with a significant operating cash flow to net income ratio of 2.13, pointing to efficient cash generation relative to profits. The free cash flow has grown by 53.06% year-over-year, indicating improved liquidity capacity. The free cash flow to net income ratio of 1.94 further emphasizes robust cash flow health.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.09B	2.15B	2.24B	2.37B	2.37B	2.17B
	Gross Profit
652.90M	634.90M	633.70M	669.10M	726.60M	663.60M
	EBIT
190.10M	196.20M	180.50M	203.80M	266.20M	219.70M
	EBITDA
223.70M	230.70M	237.00M	268.80M	325.90M	276.90M
	Net Income Common Stockholders
160.40M	166.60M	149.20M	172.70M	230.90M	190.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
382.60M	322.10M	198.50M	195.80M	343.80M	242.50M
	Total Assets
846.10M	1.26B	1.32B	1.49B	1.45B	1.20B
	Total Debt
272.90M	158.70M	179.90M	197.10M	206.10M	165.20M
	Net Debt
-109.70M	-163.40M	109.00M	3.40M	-135.60M	-75.20M
	Total Liabilities
328.60M	617.10M	683.70M	807.90M	714.50M	593.90M
	Stockholders Equity
515.70M	645.20M	634.70M	678.80M	731.10M	601.50M
Cash Flow		Free Cash Flow
233.90M	322.80M	210.90M	103.70M	232.30M	202.40M
	Operating Cash Flow
264.70M	355.20M	238.80M	139.60M	280.30M	237.00M
	Investing Cash Flow
-53.20M	-54.40M	-27.50M	-32.00M	-47.80M	-34.50M
	Financing Cash Flow
-185.10M	-171.10M	-191.20M	-249.80M	-155.70M	-187.00M

VTech Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 52.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0303, the sentiment is Negative. The current price of 52.9 is above the 20-day moving average (MA) of 52.87, below the 50-day MA of 54.14, and above the 200-day MA of 52.45, indicating a neutral trend. The MACD of 0.40 indicates Negative momentum. The RSI at 48.54 is Neutral, neither overbought nor oversold. The STOCH value of 14.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0303.

VTech Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0303	74 Outperform	$13.38B	10.70	24.32%	11.16%	-5.78%	-0.51%
Sector *	60 Neutral	$11.58B	10.33	-7.23%	2.94%	7.47%	-10.84%

VTech Holdings Corporate Events

VTech Holdings Announces Upcoming Board Meeting for Final Results Approval

VTech Holdings Limited has announced a board meeting scheduled for May 14, 2025, to approve the publication of its final results for the fiscal year ending March 31, 2025, and to consider the payment of a final dividend. This announcement indicates the company’s ongoing commitment to transparency and shareholder engagement, potentially impacting its financial standing and investor relations.

VTech Holdings Enhances Nomination Committee Charter for Improved Governance

VTech Holdings Limited has updated its Nomination Committee Charter, emphasizing the importance of fair and transparent director appointments. The Committee, chaired by an Independent Non-executive Director and composed mainly of INEDs, will meet at least annually to review the Board’s structure, diversity, and effectiveness. The Committee is tasked with identifying qualified Board candidates, assessing directors’ contributions, and ensuring compliance with Hong Kong’s Listing Rules. This move is expected to enhance VTech’s corporate governance and strategic alignment, potentially impacting stakeholders positively by ensuring a diverse and effective leadership team.

VTech Holdings Announces Board Restructuring

VTech Holdings Limited announced changes to its board of directors, effective from March 13, 2025. The update includes the roles and functions of executive, non-executive, and independent non-executive directors, as well as their positions on various board committees. This restructuring is likely aimed at enhancing corporate governance and aligning with strategic goals, potentially impacting the company’s operational efficiency and stakeholder relations.

VTech Holdings Strengthens Governance with New Nomination Committee Appointment

VTech Holdings Limited has announced the appointment of Professor GAN Jie as a member of its Nomination Committee, effective from March 13, 2025. This strategic appointment is expected to enhance the governance structure of the company, potentially impacting its operational efficiency and stakeholder confidence positively.