SEHK:856

Stock Analysis Report

VSTECS Holdings

Executive Summary

VSTECS Holdings Limited, an investment holding company, distributes information, communication, and technology products and services in North Asia and South East Asia.

Snowflake

Fundamentals

Undervalued with moderate growth potential.

Share Price & News

How has VSTECS Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-0.7%

856

0.5%

HK Electronic

0.3%

HK Market


1 Year Return

3.6%

856

-4.4%

HK Electronic

-1.5%

HK Market

Return vs Industry: 856 exceeded the Hong Kong Electronic industry which returned -4.4% over the past year.

Return vs Market: 856 exceeded the Hong Kong Market which returned -1.5% over the past year.


Shareholder returns

856IndustryMarket
7 Day-0.7%0.5%0.3%
30 Day3.1%-2.0%0.5%
90 Day-5.2%6.0%-4.4%
1 Year7.4%3.6%-1.1%-4.4%2.1%-1.5%
3 Year88.4%66.5%-2.0%-9.8%14.7%3.2%
5 Year85.6%49.3%56.1%35.8%21.5%1.2%

Price Volatility Vs. Market

How volatile is VSTECS Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is VSTECS Holdings undervalued compared to its fair value and its price relative to the market?

45.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 856 (HK$4.03) is trading below our estimate of fair value (HK$7.35)

Significantly Below Fair Value: 856 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 856 is good value based on its PE Ratio (7.5x) compared to the Electronic industry average (8.9x).

PE vs Market: 856 is good value based on its PE Ratio (7.5x) compared to the Hong Kong market (10.4x).


Price to Earnings Growth Ratio

PEG Ratio: 856 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 856 is overvalued based on its PB Ratio (1.1x) compared to the HK Electronic industry average (1x).


Next Steps

Future Growth

How is VSTECS Holdings forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

17.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 856's forecast earnings growth (17.8% per year) is above the savings rate (2%).

Earnings vs Market: 856's earnings (17.8% per year) are forecast to grow faster than the Hong Kong market (11.2% per year).

High Growth Earnings: 856's earnings are forecast to grow, but not significantly.

Revenue vs Market: 856's revenue (12.5% per year) is forecast to grow faster than the Hong Kong market (10.4% per year).

High Growth Revenue: 856's revenue (12.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 856's Return on Equity is forecast to be low in 3 years time (16.8%).


Next Steps

Past Performance

How has VSTECS Holdings performed over the past 5 years?

8.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 856's earnings have grown by 8.9% per year over the past 5 years.

Accelerating Growth: 856's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 856 had negative earnings growth (-5.2%) over the past year, making it difficult to compare to the Electronic industry average (-10.9%).


Return on Equity

High ROE: 856's Return on Equity (14.8%) is considered low.


Return on Assets

ROA vs Industry: 856's Return on Assets is below or equal to the Electronic industry average last year.


Return on Capital Employed

ROCE Improving: 856 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is VSTECS Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 856's short term assets (HK$20.5B) exceeds its short term liabilities (HK$15.6B)

Long Term Liabilities: 856's short term assets (20.5B) exceeds its long term liabilities (1.6B)


Debt to Equity History and Analysis

Debt Level: 856's debt to equity ratio (156.5%) is considered high

Reducing Debt: 856's debt to equity ratio has increased from 78.8% to 156.5% over the past 5 years.

Debt Coverage: 856's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 856's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet

Inventory Level: 856 has a high level of physical assets or inventory.

Debt Coverage by Assets: 856's debt is covered by short term assets (assets are 2.510400x debt).


Next Steps

Dividend

What is VSTECS Holdings's current dividend yield, its reliability and sustainability?

3.77%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%2.3%markettop25%6.3%industryaverage2.8%forecastin3Years5.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 856's dividend (3.77%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.28%).

High Dividend: 856's dividend (3.77%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

Stable Dividend: 856's dividend payments have been volatile in the past 10 years.

Growing Dividend: 856's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.2%), 856's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of VSTECS Holdings's salary, the management and board of directors tenure and is there insider trading?

5.9yrs

Average management tenure


CEO

David Li (56yo)

5.9yrs

Tenure

HK$8,018,000

Compensation

Mr. Jialin Li, also known as David, co-founded VST Holdings Ltd. and has been its Chief Executive Officer since November 18, 2013. Mr. Li served as Chief Executive Officer of VST Holdings Ltd. until Octobe ...


CEO Compensation Analysis

Compensation vs. Market: David's total compensation ($USD1.02M) is about average for companies of similar size in the Hong Kong market ($USD403.44K).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.9yrs

Average Tenure

49yo

Average Age

Experienced Management: 856's management team is seasoned and experienced (5.9 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

53yo

Average Age

Experienced Board: 856's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

Insider Buying: 856 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$3,271,80309 Sep 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares798,000
Max PriceHK$4.10
BuyHK$386,00023 May 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares100,000
Max PriceHK$3.86
BuyHK$190,00022 May 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares50,000
Max PriceHK$3.80
BuyHK$1,155,00021 May 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares300,000
Max PriceHK$3.85
BuyHK$148,11807 May 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares36,000
Max PriceHK$4.11
BuyHK$443,44006 May 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares106,000
Max PriceHK$4.18
BuyHK$4,258,76403 May 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares1,016,000
Max PriceHK$4.19
BuyHK$3,493,57002 May 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares832,000
Max PriceHK$4.20
BuyHK$178,36015 Jan 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares52,000
Max PriceHK$3.43
BuyHK$2,611,99911 Jan 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares800,000
Max PriceHK$3.26
BuyHK$6,503,00108 Jan 19
Jialin Li
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares1,858,000
Max PriceHK$3.50

Ownership Breakdown


Management Team

  • David Li (56yo)

    Chairman & CEO

    • Tenure: 5.9yrs
    • Compensation: HK$8.02m
  • Sebastian Chong

    President of Singapore & Indonesia

    • Tenure: 0.6yrs
  • William Ong (47yo)

    Group CFO & Executive Director

    • Tenure: 11yrs
    • Compensation: HK$3.28m
  • Yibing Zhou (56yo)

    Deputy Chairman

    • Tenure: 1.8yrs
    • Compensation: HK$3.79m
  • Cheuk Yue (38yo)

    Company Secretary

    • Tenure: 8.1yrs
  • Ying Chow (51yo)

    Group COO & Executive Director

    • Tenure: 6.8yrs
    • Compensation: HK$3.79m
  • Yue Li (30yo)

    Executive Director

    • Tenure: 3.4yrs
    • Compensation: HK$1.02m

Board Members

  • David Li (56yo)

    Chairman & CEO

    • Tenure: 5.9yrs
    • Compensation: HK$8.02m
  • Hin Chi Lam (55yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: HK$120.00k
  • Wei Li (64yo)

    Independent Non-Executive Director

    • Tenure: 12.2yrs
    • Compensation: HK$120.00k
  • William Ong (47yo)

    Group CFO & Executive Director

    • Tenure: 11yrs
    • Compensation: HK$3.28m
  • Xiaolong Wang (64yo)

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: HK$120.00k
  • Yibing Zhou (56yo)

    Deputy Chairman

    • Tenure: 1.8yrs
    • Compensation: HK$3.79m
  • Xin Liang (48yo)

    Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: HK$120.00k
  • Ying Chow (51yo)

    Group COO & Executive Director

    • Tenure: 6.8yrs
    • Compensation: HK$3.79m
  • Yue Li (30yo)

    Executive Director

    • Tenure: 3.4yrs
    • Compensation: HK$1.02m
  • Wai Man Hung (50yo)

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: HK$120.00k

Company Information

VSTECS Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: VSTECS Holdings Limited
  • Ticker: 856
  • Exchange: SEHK
  • Founded: 1991
  • Industry: Technology Distributors
  • Sector: Tech
  • Market Cap: HK$5.872b
  • Shares outstanding: 1.45b
  • Website: https://www.vstecs.com

Number of Employees


Location

  • VSTECS Holdings Limited
  • China Merchants Tower
  • Unit 3312, 33rd Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
856SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMay 2002
856SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMay 2002
VSTH.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJul 2010

Biography

VSTECS Holdings Limited, an investment holding company, distributes information, communication, and technology products and services in North Asia and South East Asia. It operates through Components Produc ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 12:40
End of Day Share Price2019/10/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.