VSTECS Holdings Limited (0856) AI Stock Analysis

• Market Cap: HK$13.32B
• Dividend Yield: 3.09%
• Average Volume (3M): 10.08M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 1.11
• 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: 6,639,702
• 30 Day Avg. Volume: 10,079,877
• PEG Ratio: 0.45
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.08
• P/FCF Ratio: 4.28
• 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$14.80
• Price Target Upside: 78.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: HK$9.00 ▲(8.30% Upside)

The overall stock score of 68 reflects strong valuation metrics and solid financial performance, particularly in revenue growth and profitability. However, technical analysis indicates bearish momentum, and liquidity issues in cash flow management pose a risk. The absence of earnings call insights and corporate events limits additional context.

Positive Factors

Revenue Growth

The robust revenue growth indicates strong market demand and effective sales strategies, enhancing the company's competitive position in the tech distribution sector.

Profitability Improvements

Improved profitability margins suggest efficient cost management and operational effectiveness, which are crucial for sustaining long-term financial health.

Strategic Partnerships

These partnerships expand market reach and product offerings, positioning the company to capture growth in emerging tech markets and maintain a competitive edge.

Negative Factors

Cash Flow Management

Zero operating cash flow highlights liquidity challenges, which could restrict the company's ability to invest in growth opportunities and manage financial obligations.

Moderate Leverage

While manageable, moderate leverage requires careful monitoring to prevent potential financial strain and ensure long-term stability.

Reliance on Liabilities

A high reliance on liabilities can increase financial risk, particularly in volatile market conditions, impacting the company's resilience and flexibility.

VSTECS Holdings Limited Business Overview & Revenue Model

Company Description

VSTECS Holdings Limited, an investment holding company, develops information technology (IT) product channel and provides technical solution integration services in North Asia and South East Asia. It operates through three segments: Enterprise Systems, Consumer Electronics, and Cloud Computing. The Enterprise Systems segment provides enterprise system tools, such as middleware, operating systems, Unix/NT servers, databases, and storage equipment for IT infrastructure; and IT infrastructure design and implementation, training, maintenance, and support services. The Consumer Electronics segment offers finished IT products, including computers, mobile phones, drones, smart sports watches, 3D printers, game consoles, etc. The Cloud Computing segment provides cloud computing solutions and services. The company is also involved in the retail of IT products, equipment, and accessories; import and export of IT products; and provision of supply chains management and warehouse transport, electronic settlement business center, and project investment and marketing research services. It serves individuals, small and medium enterprises, large corporations, and government entities through a distribution network of resellers comprising retailers, system integrators, and corporate dealers. The company was formerly known as VST Holdings Limited and changed its name to VSTECS Holdings Limited in June 2017. VSTECS Holdings Limited was founded in 1991 and is headquartered in Central, Hong Kong.

How the Company Makes Money

VSTECS Holdings Limited generates revenue through several key streams, primarily from the distribution of IT products, including hardware and software solutions. The company earns margins on the products it distributes from major technology vendors, which form the backbone of its revenue model. Additionally, VSTECS provides value-added services such as system integration, technical support, and consulting, which further contribute to its revenue. Strategic partnerships with globally recognized technology brands enhance its offerings and market reach, while a strong emphasis on digital solutions and cloud services positions the company to capture growth in emerging tech markets. The mix of product sales and service offerings allows VSTECS to maintain a diversified revenue base, which is crucial for its financial stability and growth prospects.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	94.52B	89.09B	73.89B	77.32B	78.34B	69.96B
Gross Profit	4.32B	3.93B	3.50B	3.37B	3.64B	3.13B
EBITDA	1.87B	1.75B	1.62B	1.47B	1.79B	1.54B
Net Income	1.21B	1.05B	922.03M	823.07M	1.31B	1.07B
Balance Sheet
Total Assets	40.51B	38.39B	35.02B	34.77B	32.18B	29.43B
Cash, Cash Equivalents and Short-Term Investments	6.19B	5.44B	4.13B	8.23B	4.13B	4.05B
Total Debt	10.02B	9.68B	8.44B	8.65B	6.53B	7.01B
Total Liabilities	30.90B	29.52B	26.80B	27.11B	24.27B	22.60B
Stockholders Equity	9.32B	8.64B	8.22B	7.66B	7.91B	6.83B
Cash Flow
Free Cash Flow	863.39M	1.69B	601.41M	-171.90M	527.57M	2.42B
Operating Cash Flow	994.54M	1.82B	640.23M	-147.87M	580.07M	2.45B
Investing Cash Flow	331.70M	-300.93M	137.76M	-517.66M	-47.04M	-36.37M
Financing Cash Flow	-1.36B	-837.13M	-1.37B	1.57B	-942.10M	-1.45B

VSTECS Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.31
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 8.31 is below the 20-day moving average (MA) of 8.69, below the 50-day MA of 9.42, and above the 200-day MA of 7.99, indicating a neutral trend. The MACD of -0.33 indicates Positive momentum. The RSI at 38.63 is Neutral, neither overbought nor oversold. The STOCH value of 43.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0856.

VSTECS Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1184	76 Outperform	HK$2.89B	6.64	14.95%	8.66%	-0.06%	-6.11%
2166	72 Outperform	HK$879.63M	7.46	11.96%	6.88%	-5.58%	22.50%
0856	68 Neutral	HK$13.32B	10.80	13.99%	3.09%	18.23%	38.95%
0400	66 Neutral	€5.14B	20.74	5.41%	―	33.59%	-15.98%
3991	65 Neutral	HK$2.93B	7.40	13.40%	4.39%	6.01%	9.76%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6036	53 Neutral	HK$467.67M	31.29	5.11%	―	14.50%	247.50%