Huan Hsin Holdings Ltd (SGX:H16), is a SGD$7.60M small-cap, which operates in the tech hardware industry based in Singapore. As various enterprises look to technology to enable their own transformations, the opportunities for technology companies have widened extensively. Tech analysts are forecasting for the entire hardware tech industry, a positive double-digit growth of 17.76% in the upcoming year . Below, I will examine the sector growth prospects, as well as evaluate whether Huan Hsin Holdings is lagging or leading in the industry. See our latest analysis for Huan Hsin Holdings
What’s the catalyst for Huan Hsin Holdings’s sector growth?
The battle for competitive advantage has led businesses to adopt new the cutting-edge technology, or risk being left behind. Many technologies are now coming into their own as their power and speed increase and the cost of delivering them goes down. And some are pursing growth through various strategies including new M&A, collaboration and alliances, as well as cost reduction and organic growth. In the previous year, the industry saw growth in the twenties, beating the Singapore market growth of 7.76%. Given the lack of analyst consensus in Huan Hsin 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 Huan Hsin Holdings and the sector relatively cheap?
The tech hardware industry is trading at a PE ratio of 10x, in-line with 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 11.65% compared to the market’s 7.94%, potentially illustrative of past tailwinds. On the stock-level, Huan Hsin Holdings is trading at a lower PE ratio of 0x, making it cheaper 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 Huan Hsin 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.