In This Article:
Telechoice International Limited (SGX:T41), is a S$114m small-cap, which operates in the tech hardware industry based in Singapore. The past two decades have experienced unprecedented changes in technology, and the next decade looks equally drastic. Tech analysts are forecasting for the entire hardware tech industry, a fairly unexciting growth rate of 3.3% in the upcoming year , and an enormous growth of 75% over the next couple of years. Not surprisingly, this rate is more than double the growth rate of the Singapore stock market as a whole. Today, I will analyse the industry outlook, as well as evaluate whether Telechoice International is lagging or leading in the industry.
See our latest analysis for Telechoice International
What’s the catalyst for Telechoice International’s sector growth?
Since the regulatory environment is unlikely to become less complex, organizations will need to address the constantly evolving rules for governing data. In the previous year, the industry saw growth in the teens, beating the Singapore market growth of 12%. Telechoice International lags the pack with its negative growth rate of -8.8% over the past year, which indicates the company has been growing at a slower pace than its tech hardware peers. However, in the upcoming year, Telechoice International is expected to deliver growth in-line with its industry peers, at a growth rate of 3.3%.
Is Telechoice International and the sector relatively cheap?
The tech hardware sector’s PE is currently hovering around 11.88x, relatively similar to the rest of the Singapore stock market PE of 12.46x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. Furthermore, the industry returned a similar 8.7% on equities compared to the market’s 7.7%. On the stock-level, Telechoice International is trading at a PE ratio of 15.44x, which is relatively in-line with the average tech hardware stock. In terms of returns, Telechoice International generated 11% in the past year, which is 2.2% over the tech hardware sector.
Next Steps:
Telechoice International’s future growth prospect aligns with that of the broader market and it is trading in-line with its peers. So if you like its growth prospects, you’ll be paying a fair value for the company. If the stock has been on your watchlist for a while, now may be the time to enter. However, before you make a decision on the stock, I suggest you look at Telechoice International’s fundamentals in order to build a holistic investment thesis.