VSTECS Holdings Limited’s (VSTECS) 1H22 results were impacted by unfavourable FX movement and higher non-cash costs. The Company reported decent revenue growth despite the macro uncertainties. We maintain that the Company will benefit from increasing demand in the region for IT products, such as Big Data, cloud computing, AI and network security. We revised down our net profit forecasts after the 1H22 results announcement. VSTECS’ valuation doesn’t look particular expensive and offers a decent yield. We reiterate our ADD rating and have a lower target price of HK$9.37 (based on 11x 2022F P/E). Our target P/E multiple remains unchanged.