Latest news with #VSTECS
Yahoo
02-06-2025
- Business
- Yahoo
Here's Why We Think VSTECS Berhad (KLSE:VSTECS) Might Deserve Your Attention Today
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away. Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like VSTECS Berhad (KLSE:VSTECS). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That makes EPS growth an attractive quality for any company. We can see that in the last three years VSTECS Berhad grew its EPS by 11% per year. That growth rate is fairly good, assuming the company can keep it up. Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note VSTECS Berhad achieved similar EBIT margins to last year, revenue grew by a solid 11% to RM3.0b. That's progress. In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers. See our latest analysis for VSTECS Berhad Since VSTECS Berhad is no giant, with a market capitalisation of RM1.2b, you should definitely check its cash and debt before getting too excited about its prospects. It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that VSTECS Berhad insiders have a significant amount of capital invested in the stock. To be specific, they have RM96m worth of shares. That's a lot of money, and no small incentive to work hard. Those holdings account for over 8.4% of the company; visible skin in the game. While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. Well, based on the CEO pay, you'd argue that they are indeed. For companies with market capitalisations between RM426m and RM1.7b, like VSTECS Berhad, the median CEO pay is around RM624k. The CEO of VSTECS Berhad was paid just RM54k in total compensation for the year ending December 2024. This could be considered a token amount, and indicates that the company does not need to use payment to motivate the CEO - that is often a good sign. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making. As previously touched on, VSTECS Berhad is a growing business, which is encouraging. The fact that EPS is growing is a genuine positive for VSTECS Berhad, but the pleasant picture gets better than that. Boasting both modest CEO pay and considerable insider ownership, you'd argue this one is worthy of the watchlist, at least. Of course, just because VSTECS Berhad is growing does not mean it is undervalued. If you're wondering about the valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. Although VSTECS Berhad certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Malaysian companies that not only boast of strong growth but have strong insider backing. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
The Star
14-05-2025
- Business
- The Star
VSTECS optimistic after 24% 1Q25 profit growth
KUALA LUMPUR: Vstecs Bhd , which saw its net profit rise 24% in the first quarter ended March 31 (1Q25), is optimistic about sustaining this growth trajectory through the second quarter and the rest of the year. The ICT distributor noted that despite cautious consumer sentiment amid ongoing uncertainties, both the enterprise and public sectors remain focused on advancing their digitalisation and AI transformation agendas, highlighting continued resilience within the ICT sector. 'Growth is also being supported by the launch of new consumer devices, a surge in enterprise infrastructure projects, and increased public sector ICT spending, which is reflected in our sales opportunity,' VSTECS said in a filing with Bursa Malaysia. In 1Q25, VSTECS' net profit rose 24% to RM17.7mil, or earnings per share of 5.00 sen compared with RM14.3mil, or 4.00 sen in the year-ago quarter. The higher revenue was due to broad-based growth, with all three business segments — ICT distribution, enterprise systems, and ICT services — recording year-on-year increases, driven by strong digitalisation trends. 'This is our best first quarter performance and signals a strong start to FY2025. We are benefiting from multiple growth vectors, and ICT spending remains resilient amid the relentless pace of digital adoption, expanding AI use cases, and rising demand for next-generation technologies,' chief executive officer JH Soong said in a statement.
