In This Article:
GET Holdings Limited (SEHK:8100), is a HK$193.33M small-cap, which operates in the software industry based in Hong Kong. Whether it’s the next big thing in tech or an alliance with a partner in another industry, tech companies have plenty of opportunities for their companies to thrive. Tech analysts are forecasting for the entire software tech industry, an extremely elevated growth of 41.31% in the upcoming year , and a massive growth of 64.69% over the next couple of years. Not surprisingly, this rate is more than double the growth rate of the Hong Kong stock market as a whole. Today, I will analyse the industry outlook, as well as evaluate whether GET Holdings is lagging or leading in the industry. Check out our latest analysis for GET Holdings
What’s the catalyst for GET Holdings’s sector growth?
US-based mega-competitors have been, and continue to be, the key drivers of industry growth. Many tech companies are repositioning themselves by focusing on high-growth areas such as IBM’s artificial intelligence play in Watson and Adobe’s shift to marketing its product for cloud computing. Over the past year, the industry saw growth of 8.89%, though still underperforming the wider Hong Kong stock market. GET Holdings lags the pack with its sustained negative earnings over the past couple of years. The company’s outlook seems uncertain, with a lack of analyst coverage, which doesn’t boost our confidence in the stock. This lack of growth and transparency means GET Holdings may be trading cheaper than its peers.
Is GET Holdings and the sector relatively cheap?
The software tech sector’s PE is currently hovering around 32.13x, above the broader Hong Kong stock market PE of 13.78x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry returned a lower 5.82% compared to the market’s 9.57%, which may be indicative of past headwinds. Since GET Holdings’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge GET Holdings’s value is to assume the stock should be relatively in-line with its industry.
Next Steps:
GET Holdings has been an tech industry laggard in the past year. If GET Holdings has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although it delivered lower growth relative to its tech peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. However, before you make a decision on the stock, I suggest you look at GET Holdings’s fundamentals in order to build a holistic investment thesis.