VSTECS Holdings Limited (0856) AI Stock Analysis

• Market Cap: HK$13.17B
• Dividend Yield: 2.8%
• Average Volume (3M): 18.47M
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.97
• Revenue Growth: 20.56%
• EPS Growth: 14.73%
• Country: HK
• Employees: 5,622
• Sector: Technology
• Sector Strength: 93
• Industry: Technology Distributors
• EPS (TTM): 0.74
• Shares Outstanding: 1,436,452,000
• 10 Day Avg. Volume: 36,179,630
• 30 Day Avg. Volume: 18,470,990
• PEG Ratio: 0.58
• Price to Book (P/B): 1.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 70.13
• 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$7.00
• Price Target Upside: -23.66% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 74 Outperform
• Price Target: HK$11.00 ▲(19.96%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

Dividends

VSTECS has maintained decent shareholder returns over past several years, and raised its dividend payout ratio to 40% in 2023, translating into a dividend yield of 5%.

Market Positioning

VSTECS is well-positioned to benefit from the booming demand for AI computing, IT localisation trend in China, and robust digitalisation demand in Southeast Asia.

Revenue Growth

VSTECS reported FY24 financial results with total revenue up by 21% YoY, mainly due to robust demand for AI solutions and strong revenue growth in the South East Asian market.

Negative Factors

Gross Profit Margin

GPM was down by 0.3ppt YoY to 4.4%, primarily due to the intense competition in the domestic market and increased revenue contribution from AI server distribution, which tends to have a lower GPM.

Market Competition

Intense competition in the domestic market is affecting VSTECS's gross profit margin.

VSTECS Holdings Limited Business Overview & Revenue Model

Company Description

VSTECS Holdings Limited (0856) is a leading integrated information and communications technology (ICT) provider in Asia, focusing on the distribution of IT products, enterprise systems, and IT services. The company operates through various sectors, including technology distribution, enterprise system solutions, and managed services. VSTECS partners with numerous global technology brands to offer a wide range of products, including computer systems, software, networking equipment, and digital media products.

How the Company Makes Money

VSTECS Holdings Limited generates revenue primarily through its distribution of IT products and solutions, leveraging its extensive network and partnerships with major global technology manufacturers. The company earns money by purchasing products from these manufacturers and selling them to a broad range of customers, including resellers, system integrators, and corporate clients. Additionally, VSTECS provides value-added services such as logistics, technical support, and marketing, which enhance its revenue streams. The company also generates income from its enterprise systems segment by offering integrated solutions and managed services to businesses, helping them optimize their IT infrastructure and operations. Key factors contributing to its earnings include strategic alliances with leading technology brands, a robust distribution network, and a focus on expanding its service offerings in high-demand areas such as cloud computing and cybersecurity.

VSTECS Holdings Limited Financial Statement Overview

Summary

Strong revenue growth and profitability improvements are evident, with a solid gross profit margin and increased net profit margin. However, the cash flow statement indicates potential liquidity issues, with zero operating cash flow in 2024. The balance sheet shows moderate leverage that requires monitoring.

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: 9.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 9.17 is above the 20-day moving average (MA) of 7.98, above the 50-day MA of 7.09, and above the 200-day MA of 5.61, indicating a bullish trend. The MACD of 0.58 indicates Negative momentum. The RSI at 68.56 is Neutral, neither overbought nor oversold. The STOCH value of 51.19 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$13.17B	12.08	12.48%	2.80%	20.56%	14.73%
0400	73 Outperform	HK$3.15B	13.47	4.79%	―	12.40%	-11.30%
1184	69 Neutral	HK$2.70B	5.38	18.22%	5.71%	24.08%	24.13%
3991	69 Neutral	HK$2.21B	5.83	13.10%	5.81%	7.58%	5.20%
2166	66 Neutral	HK$864.97M	8.36	10.77%	6.70%	-17.97%	46.24%
Sector *	57 Neutral	HK$14.14B	5.06	-5.75%	5.40%	9.34%	-42.23%
6036	48 Neutral	HK$462.30M	68.25	2.38%	―	20.64%	―

VSTECS Holdings Limited Corporate Events

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.

The most recent analyst rating on (HK:0856) stock is a Buy with a HK$7.20 price target. To see the full list of analyst forecasts on VSTECS Holdings Limited stock, see the HK:0856 Stock Forecast page.

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.

The most recent analyst rating on (HK:0856) stock is a Buy with a HK$7.20 price target. To see the full list of analyst forecasts on VSTECS Holdings Limited stock, see the HK:0856 Stock Forecast page.

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.

The most recent analyst rating on (HK:0856) stock is a Buy with a HK$7.20 price target. To see the full list of analyst forecasts on VSTECS Holdings Limited stock, see the HK:0856 Stock Forecast page.

VSTECS Holdings Limited Reports Strong Q1 2025 Financial Growth

VSTECS Holdings Limited reported a significant financial performance improvement in the first quarter of 2025, with revenue increasing by 16-17%, gross profit by 20-21%, and net profit attributable to shareholders by 28-29% compared to the same period in 2024. This unaudited financial update suggests a strong start to the year for VSTECS, indicating positive momentum in its operations and potentially enhancing its market position, though stakeholders are advised to exercise caution as the figures are preliminary and subject to change.

The most recent analyst rating on (HK:0856) stock is a Buy with a HK$7.20 price target. To see the full list of analyst forecasts on VSTECS Holdings Limited stock, see the HK:0856 Stock Forecast page.

VSTECS Holdings Limited Announces 2025 AGM and Key Resolutions

VSTECS Holdings Limited has announced its annual general meeting scheduled for May 22, 2025, where key agenda items include the approval of financial statements, declaration of a final dividend, re-election of directors, and re-appointment of auditors. Additionally, the meeting will consider resolutions to authorize the board to allot and issue shares, which could impact the company’s capital structure and shareholder value.

VSTECS Holdings Limited Announces 2025 Annual General Meeting

VSTECS Holdings Limited has announced its upcoming annual general meeting scheduled for May 22, 2025, in Hong Kong. The meeting will address several key matters, including the consideration of the audited financial statements for 2024, the declaration of a final dividend, the re-election of directors, and the re-appointment of KPMG as auditors. Additionally, the company seeks approval for the directors to allot and issue additional shares, subject to certain conditions. These resolutions aim to strengthen the company’s governance and financial strategies, potentially impacting its market position and shareholder value.