Time Interconnect Technology (SEHK:1729): Examining Valuation After Major Supply Agreement Extensions and Increased Capacity

Time Interconnect Technology (SEHK:1729) has updated its agreements with Luxshare Precision and BCS, extending contract terms and increasing annual supply limits. These changes, scheduled to take effect in January 2026, are intended to support growing demand and strengthen shareholder alignment.

See our latest analysis for Time Interconnect Technology.

The recent contract updates arrive as the stock enjoys significant upward momentum, with a year-to-date share price return of 251.85% and an impressive five-year total shareholder return exceeding 4,366%. While shorter-term swings have been volatile, long-term investors have captured extraordinary gains as the business strengthens its industry ties.

If deals like these have you thinking bigger, now is an ideal time to broaden your search and see what’s possible with fast growing stocks with high insider ownership.

Despite spectacular returns and an optimistic outlook, the key question is whether Time Interconnect Technology’s stock is currently undervalued, or if all expected growth is already reflected in the share price. This would leave little room for upside.

Price-to-Earnings of 50.6x: Is it justified?

Time Interconnect Technology’s shares currently trade at a price-to-earnings (PE) ratio of 50.6x, placing them well above both peer and industry averages, which sends a strong signal that the market expects high and sustained future growth.

The price-to-earnings ratio measures how much investors are willing to pay for each dollar of current earnings, and is especially important for fast-growing companies in sectors where future profits are in focus. A higher ratio can mean investors expect profits to accelerate, but it may also signal potential over-optimism if profit growth cannot keep pace with expectations.

At 50.6x, Time Interconnect’s PE is more than double the peer average of 25.2x and significantly above the Asian Electrical sector average of 32.8x. Notably, this valuation also stands well above the estimated fair PE of 27.9x, highlighting how much future growth is already factored into the stock price. The market could eventually move closer to this level if growth falters or expectations reset.

Explore the SWS fair ratio for Time Interconnect Technology

Result: Price-to-Earnings of 50.6x (OVERVALUED)

However, sustained high expectations make the stock vulnerable to any earnings slowdown or shifts in market sentiment. These factors could trigger rapid price corrections.

Find out about the key risks to this Time Interconnect Technology narrative.

Another View: Is the DCF Model Saying Something Different?

While the price-to-earnings ratio suggests Time Interconnect Technology is trading well above typical levels, our DCF model provides a slightly different perspective. According to our calculations, the current price of HK$14.25 is actually higher than our DCF-based fair value estimate of HK$13.48, indicating modest overvaluation. This shows that even models based on future cash flows can suggest the stock is fully priced, rather than just relying on market sentiment.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Time Interconnect Technology for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 882 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Time Interconnect Technology Narrative

If you have a different perspective or want to dive deeper into the numbers yourself, you can easily shape your own view in just minutes. Do it your way.

A great starting point for your Time Interconnect Technology research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Don’t miss great opportunities. Real growth stories are just a click away. Tap into unique trends and innovative sectors shaping tomorrow’s market right now.

• Uncover opportunities among high-yield companies building steady income streams by getting started with these 15 dividend stocks with yields > 3%.
• Spot tomorrow’s AI success stories early and see how machine learning leaders are transforming industries with these 27 AI penny stocks.
• Secure value by scouting these 882 undervalued stocks based on cash flows that offer strong fundamentals and attractive price points that others may be overlooking.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com