VSTECS Holdings Limited (0856) AI Stock Analysis

• Market Cap: HK$14.90B
• Dividend Yield: 2.5%
• Average Volume (3M): 17.35M
• Price to Earnings (P/E): 12.1
• Beta (1Y): 1.02
• Revenue Growth: 18.23%
• EPS Growth: 38.95%
• Country: HK
• Employees: 5,622
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 0.44
• Shares Outstanding: 1,436,452,000
• 10 Day Avg. Volume: 12,403,177
• 30 Day Avg. Volume: 17,346,883
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: HK$14.20
• Price Target Upside: 38.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: HK$11.00 ▲(7.11% Upside)

The overall stock score of VSTECS Holdings Limited is positively influenced by strong financial performance, particularly in revenue growth and profitability. However, liquidity concerns reflected in the cash flow statement and overbought technical indicators present risks. The valuation is fair, but improved cash management is needed for sustainable growth.

Positive Factors

Revenue Growth

The strong revenue growth indicates a robust demand for VSTECS's ICT products and services, enhancing its market position and potential for future expansion.

Profitability Improvements

Improved profitability margins suggest efficient cost management and operational effectiveness, supporting long-term financial health and shareholder value.

Strategic Partnerships

Strategic partnerships with leading tech vendors enhance VSTECS's product offerings and market reach, providing a competitive edge and driving sustainable growth.

Negative Factors

Cash Flow Challenges

Zero operating cash flow highlights liquidity issues, which can constrain the company's ability to invest in growth opportunities and meet financial obligations.

Moderate Leverage

Moderate leverage indicates reliance on debt, which could pose risks if not managed carefully, potentially impacting financial flexibility and stability.

Reliance on Liabilities

A relatively low equity ratio suggests a dependence on liabilities, which may limit the company's ability to withstand economic downturns or financial stress.

VSTECS Holdings Limited Business Overview & Revenue Model

Company Description

VSTECS Holdings Limited (0856) is a leading information and communications technology (ICT) company in Asia, primarily operating in the distribution of a wide range of ICT products and services. The company provides comprehensive solutions that include IT systems, software, and related technical services to businesses and consumers. VSTECS serves various sectors including enterprise, education, and government, and partners with top-tier global technology vendors to deliver advanced technology solutions across the region.

How the Company Makes Money

VSTECS Holdings Limited generates revenue primarily through the distribution of ICT products and services. The company acts as an intermediary between global technology vendors and end-users, earning margins on the products it distributes, which include computers, network equipment, software, and peripherals. Additionally, VSTECS offers value-added services such as system integration, technical support, and consulting, which provide additional revenue streams. Strategic partnerships with major technology brands enhance its product offerings and market reach, contributing significantly to its earnings. The company's revenue model benefits from its extensive distribution network across Asia, enabling it to leverage economies of scale and establish a strong presence in the ICT market.

VSTECS Holdings Limited Financial Statement Overview

Summary

VSTECS Holdings Limited shows strong revenue growth and profitability improvements, particularly in the income statement. However, the balance sheet reveals moderate leverage, and the cash flow statement indicates potential liquidity issues with zero operating cash flow in 2024. Overall, the company is growing but should focus on improving cash management to ensure sustainable financial health.

Income Statement

The income statement shows a strong performance, with a solid gross profit margin of 4.41% in 2024, indicating efficient cost management. The net profit margin increased to 1.18%, reflecting improved profitability. Revenue grew by 20.53% from 2023 to 2024, demonstrating robust growth. EBIT and EBITDA margins also saw slight improvements, suggesting operational efficiency.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 1.12, indicating moderate leverage which is manageable but should be monitored. The return on equity (ROE) improved to 12.18%, showing effective use of equity to generate profits. The equity ratio is 22.51%, suggesting a balanced capital structure but highlighting reliance on liabilities.

Cash Flow

The cash flow statement reflects challenges with cash management as operating cash flow was zero in 2024. The free cash flow growth rate is unavailable due to zero free cash flow, and the operating cash flow to net income ratio cannot be calculated. Improvements in cash flow management are necessary to enhance liquidity.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	89.09B	73.89B	77.32B	78.34B	69.96B
Gross Profit	3.93B	3.50B	3.37B	3.64B	3.13B
EBITDA	1.75B	1.62B	1.47B	1.73B	1.48B
Net Income	1.05B	922.03M	823.07M	1.31B	1.07B
Balance Sheet
Total Assets	38.39B	35.02B	34.77B	32.18B	29.43B
Cash, Cash Equivalents and Short-Term Investments	5.44B	4.13B	8.23B	4.38B	4.05B
Total Debt	9.68B	8.44B	8.65B	6.53B	7.01B
Total Liabilities	29.52B	26.80B	27.11B	24.27B	22.60B
Stockholders Equity	8.64B	8.22B	7.66B	7.91B	6.83B
Cash Flow
Free Cash Flow	1.69B	601.41M	-171.90M	527.57M	2.42B
Operating Cash Flow	1.82B	640.23M	-147.87M	580.07M	2.45B
Investing Cash Flow	-300.93M	137.76M	-517.66M	-47.04M	-36.37M
Financing Cash Flow	-837.13M	-1.37B	1.25B	-942.10M	-1.45B

VSTECS Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0856, the sentiment is Positive. The current price of 10.27 is below the 20-day moving average (MA) of 10.44, above the 50-day MA of 10.00, and above the 200-day MA of 6.88, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 50.59 is Neutral, neither overbought nor oversold. The STOCH value of 41.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0856.

VSTECS Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0856	74 Outperform	HK$14.90B	12.08	13.99%	2.50%	18.23%	38.95%
0400	73 Outperform	4.34B	17.51	4.94%	―	33.59%	-15.98%
2166	72 Outperform	952.93M	8.29	10.46%	6.67%	-5.58%	22.50%
3991	70 Outperform	2.36B	5.97	12.73%	5.43%	6.01%	9.76%
1184	69 Neutral	2.85B	6.60	0.00%	8.79%	-0.06%	-6.11%
6036	53 Neutral	499.93M	33.45	2.32%	―	14.50%	247.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

VSTECS Holdings Limited Corporate Events

VSTECS Holdings Limited Announces Board Composition and Committee Roles

VSTECS Holdings Limited has announced the composition of its Board of Directors, highlighting the roles and functions of each member. The board includes a mix of executive, non-executive, and independent non-executive directors, with committees dedicated to audit, remuneration, and nomination. This announcement underscores the company’s commitment to strong corporate governance and strategic leadership, which is crucial for maintaining its competitive edge in the technology sector.

VSTECS Holdings Announces Board and Committee Changes

VSTECS Holdings Limited announced significant changes in its board of directors and committee composition. Mr. Yu Dingheng has resigned as an independent non-executive director (INED) to focus on his investment management company, and Dr. Gao Bin has been appointed as his successor. Dr. Gao brings extensive experience in finance and investment, having held leadership roles in various financial institutions, and will serve as the chairman of the Audit Committee and a member of the Remuneration and Nomination Committees. This transition is expected to strengthen the company’s governance and strategic direction.

VSTECS Holdings to Review Interim Results and Dividend

VSTECS Holdings Limited has announced a board meeting scheduled for August 21, 2025, to discuss and approve the interim results for the first half of the year ending June 30, 2025. The meeting will also consider the recommendation of an interim dividend and address any other business matters, potentially impacting the company’s financial strategy and shareholder returns.

VSTECS Holdings to Mitigate Forex Risks with Innovative Payment System

VSTECS Holdings Limited has announced its intention to collaborate with a third-party service provider to implement financial solutions aimed at mitigating foreign exchange risks through stablecoin-based cross-border payments. This strategic move is expected to reduce operational costs and enhance profitability stability amidst geopolitical uncertainties in ASEAN, although no binding agreements have been finalized yet.

VSTECS Holdings Explores Stablecoin Solutions for Southeast Asia

VSTECS Holdings Limited has initiated discussions to explore stablecoin payment and settlement solutions, aiming to enhance cross-border trade efficiency and optimize supply chain liquidity in Southeast Asia. The discussions are in preliminary stages, with no binding agreements yet, and focus on using compliant stablecoins to reduce transaction costs and exchange rate risks.

VSTECS Holdings Limited Announces Share Option Grant to Employees

VSTECS Holdings Limited has announced the grant of 29,400,000 share options to its employees, including all directors, under its share option scheme. The options, exercisable at a price of HK$7.29 per share, are subject to performance targets related to revenue growth of a specified subsidiary. This initiative aims to incentivize employees and align their interests with the company’s growth objectives, potentially impacting the company’s operational focus and stakeholder engagement.

VSTECS Holdings Limited Successfully Passes All AGM Resolutions

VSTECS Holdings Limited announced that all proposed resolutions at their Annual General Meeting on May 22, 2025, were passed as ordinary resolutions. Key resolutions included the approval of financial statements, the declaration of a final dividend, re-election of directors, and granting of mandates for share issuance and repurchase. The successful passing of these resolutions reflects strong shareholder support and positions the company for continued operational and strategic initiatives.