Company Coverage
Valuetronics (VALUE SP): 1HFY27: Dividend Up 75%; ICE Drives Growth
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.93
S$1.40
50.5%
S$1.88
Analyst
Analyst
Highlights
- 1HFY27 revenue of HK$897.3m (+7.3% yoy) and PATMI of HK$89.8m (-3.5% yoy) are ahead of the run-rate, representing 53.8% and 56.1% of our FY27 forecasts respectively.
- Interim dividends surged 75% yoy to 14 HK cents/share, while ICE revenue grew 18.6% yoy to HK$837.9m. Strong net cash of HK$1.15b supports the HK$300m capital return programme.
- Maintain BUY with a 25% lower target price of S$1.40, pegged to 16x FY28F ex-cash PE (+1SD), down from 19x (+2SD) to reflect the broader tech sector de-rating.
Analysis
- Revenue and PATMI ahead of run-rate. Revenue rose 7.3% yoy to HK$897.3m, driven by higher contributions from ICE's network access solutions and captioned phone customers. Reported PATMI declined 3.5% yoy to HK$89.8m, weighed down by higher component costs and increased taxes following changes to tax incentives in Vietnam. Revenue and PATMI accounted for 53.8% and 56.1% of our FY27 forecasts respectively. PBT grew 1.3% yoy to HK$106.3m despite a 1.0ppt decline in gross profit margin to 18.7% amid semiconductor supply constraints. Excluding discontinued GPU cloud operations, net profit declined 2.2% yoy to HK$95.9m.
- Interim dividend jumps 75% to 14 HK cents/share. Management declared an ordinary interim dividend of 8 HK cents/share (1HFY26: 4 HK cents) and a special interim dividend of 6 HK cents/share (1HFY26: 4 HK cents), bringing total interim dividends to 14 HK cents/share (+75% yoy). This represents a payout ratio of approximately 59.8%, in line with its revised dividend policy of 50-70% of net profit, reinforcing management's commitment to enhancing shareholder returns through its HK$300m capital return programme.
Highlights
- 1HFY27 revenue of HK$897.3m (+7.3% yoy) and PATMI of HK$89.8m (-3.5% yoy) are ahead of the run-rate, representing 53.8% and 56.1% of our FY27 forecasts respectively.
- Interim dividends surged 75% yoy to 14 HK cents/share, while ICE revenue grew 18.6% yoy to HK$837.9m. Strong net cash of HK$1.15b supports the HK$300m capital return programme.
- Maintain BUY with a 25% lower target price of S$1.40, pegged to 16x FY28F ex-cash PE (+1SD), down from 19x (+2SD) to reflect the broader tech sector de-rating.
Analysis
- Revenue and PATMI ahead of run-rate. Revenue rose 7.3% yoy to HK$897.3m, driven by higher contributions from ICE's network access solutions and captioned phone customers. Reported PATMI declined 3.5% yoy to HK$89.8m, weighed down by higher component costs and increased taxes following changes to tax incentives in Vietnam. Revenue and PATMI accounted for 53.8% and 56.1% of our FY27 forecasts respectively. PBT grew 1.3% yoy to HK$106.3m despite a 1.0ppt decline in gross profit margin to 18.7% amid semiconductor supply constraints. Excluding discontinued GPU cloud operations, net profit declined 2.2% yoy to HK$95.9m.
- Interim dividend jumps 75% to 14 HK cents/share. Management declared an ordinary interim dividend of 8 HK cents/share (1HFY26: 4 HK cents) and a special interim dividend of 6 HK cents/share (1HFY26: 4 HK cents), bringing total interim dividends to 14 HK cents/share (+75% yoy). This represents a payout ratio of approximately 59.8%, in line with its revised dividend policy of 50-70% of net profit, reinforcing management's commitment to enhancing shareholder returns through its HK$300m capital return programme.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.93
S$1.40
50.5%
S$1.88
Analyst
Analyst
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