ASTI Holdings Limited (SGX:575), is a SGD$55.00M small-cap, which operates in the tech hardware industry based in Singapore. Technology has become a vital component of every industry, bringing unprecedented opportunities for growth, along with challenges and competition. Tech analysts are forecasting for the entire hardware tech industry, a strong double-digit growth of 14.71% in the upcoming year . Today, I will analyse the industry outlook, as well as evaluate whether ASTI Holdings is lagging or leading in the industry. See our latest analysis for ASTI Holdings
What’s the catalyst for ASTI 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 of over 50%, beating the Singapore market growth of 7.76%. Given the lack of analyst consensus in ASTI Holdings’s outlook, we could potentially assume the stock’s growth rate broadly follows its tech hardware industry peers. This means it is an attractive growth stock relative to the wider Singapore stock market.
Is ASTI Holdings and the sector relatively cheap?
The tech hardware industry is trading at a PE ratio of 13x, relatively similar to the rest of the Singapore stock market PE of 14x. 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 13.30% compared to the market’s 7.94%, potentially illustrative of past tailwinds. On the stock-level, ASTI Holdings is trading at a higher PE ratio of 51x, making it more expensive than the average tech stock.
What this means for you:
Are you a shareholder? tech stocks are currently expected to grow faster than the average stock on the index. This means if you’re overweight in this sector, your portfolio will be tilted towards high-growth. The industry is trading relatively in-line with the market, which means you may be paying a fair value for the tech stocks should you wish to accumulate more of your holdings.
Are you a potential investor? If you’ve been keeping an eye on the tech sector, now is the right time to dive deeper into the stock-level. The high growth prospect makes stocks such as ASTI Holdings a more appealing investment case, though the industry is trading relatively in-line with the rest of the wider marker. I suggest you examine the stock’s fundamentals, such as its financial health, before you make an investment decision.