KUALA LUMPUR (Aug 13): VSTECS Bhd (KL:VSTECS) rose in Thursday trading as investors cheered the computer hardware distributor’s latest results while analysts said the second-half could be even better.
Earnings in the first six months typically account for less than 45% of full-year earnings, and prospects remain bright for VSTECS from a boom in data centres and infrastructure to support artificial intelligence, according to UOB Kay Hian and BIMB Securities in separate notes.
“We expect earnings momentum to improve, supported by stronger enterprise project deliveries and continued public-sector spending,” BIMB Securities said.
Shares of VSTECS rose as much as 12 sen or nearly 7% to RM1.87, their highest since June 22. Upon closing, the stock pared some of its gains to finish five sen higher at RM1.80, with 10.5 million shares traded.
The consensus is bullish with all four research houses covering VSTECS having ‘buy’ calls. The average 12‑month target price stands at RM2.28, according to Bloomberg.
VSTECS has gained nearly 40% so far this year even as the stock is off all-time highs recorded in June amid broader optimism in the technology sector. However, the strong demand has led to shortages in computer chips, driving higher component costs and vendor price volatility.
“This has prompted a wait-and-see stance among some customers, particularly in the enterprise segment, where elevated server and storage prices have led private-sector customers to defer procurement pending potential price normalisation,” UOB Kay Hian said.
The caution creates near-term volatility in order flows and revenue recognition for VSTECS, but demand remains resilient, while softness in the enterprise segment should be partly cushioned by public-sector spending and project roll-outs, the house added.