Equity Analysis /
Hong Kong

HK : VST - 2021 results beat our expectations; VSTECS continuing to benefit from IT investment in the region

    Mark Po
    Mark Po

    Research Analyst

    CGS-CIMB
    26 March 2022
    Published by

    VSTECS Holdings Limited (VSTECS) reported strong 2021 results thanks to better cost control and solid revenue growth. The Company performed well in the region despite the macro uncertainties. We maintain that the Company will benefit from increasing demand for IT products, such as Big Data, cloud computing, AI and network security, in the region. Through co-operation with leading partners, VSTECS is expected to benefit from metaverse development. We raised our net profit forecasts after the 2021 results announcement. VSTECS’s valuation doesn’t look particular expensive and offers a decent yield despite its share price outperformance. We reiterate our ADD rating and have a higher target price of HK$10.88 (based on 11x 2022F P/E). Our target P/E multiple remains unchanged.