China Technology Solar Power Holdings Limited (HKG:8111) And The Tech Sector Outlook 2018

China Technology Solar Power Holdings Limited (SEHK:8111), is a HK$114.40M small-cap, which operates in the tech hardware industry based in Hong Kong. In the past decade, the mega-tech companies, such as Amazon and Microsoft, have built highly successful and ubiquitous platforms and ecosystem in which smaller companies gravitate towards. Other hardware and software tech service firms, including many that dominated before 2000, are struggling to compete, and are going through significant restructuring in order to move away from their legacy systems. Tech analysts are forecasting for the entire hardware tech industry, a positive double-digit growth of 29.31% in the upcoming year , and a whopping growth of 87.42% over the next couple of years. Not surprisingly, this rate is more than double the growth rate of the Hong Kong stock market as a whole. Is now the right time to pick up some shares in tech companies? In this article, I’ll take you through the tech sector growth expectations, and also determine whether China Technology Solar Power Holdings is a laggard or leader relative to its tech sector peers. Check out our latest analysis for China Technology Solar Power Holdings

What’s the catalyst for China Technology Solar Power Holdings's sector growth?

Despite all the opportunities, tech companies still face a host of challenges, including coping with an increasingly burdensome global regulation. Since the regulatory environment is unlikely to become less complex, organizations will need to address the constantly evolving rules for governing privacy, security and handling of data, as well as cybersecurity issues. Over the past year, the industry saw growth in the teens, beating the Hong Kong market growth of 11.10%. China Technology Solar Power Holdings lags the pack with its sustained negative earnings over the past couple of years. The company's outlook seems uncertain, with a lack of analyst coverage, which doesn't boost our confidence in the stock. This lack of growth and transparency means China Technology Solar Power Holdings may be trading cheaper than its peers.

Is China Technology Solar Power Holdings and the sector relatively cheap?

The tech hardware sector's PE is currently hovering around 11.1x, in-line with the Hong Kong stock market PE of 14.5x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. However, the industry returned a higher 12.21% compared to the market’s 10.13%, potentially illustrative of past tailwinds. Since China Technology Solar Power Holdings’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge China Technology Solar Power Holdings’s value is to assume the stock should be relatively in-line with its industry.

Next Steps:

China Technology Solar Power Holdings has been an tech industry laggard in the past year. If China Technology Solar Power Holdings has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although it delivered lower growth relative to its tech peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. However, before you make a decision on the stock, I suggest you look at China Technology Solar Power Holdings's fundamentals in order to build a holistic investment thesis.

• 1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
• 2. Historical Track Record: What has 8111's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
• 3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Technology Solar Power Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.