Excerpt from KGI Securities (Singapore) Pte. Ltd. report.
Report Summary
- PC Partner Group Ltd, a leading manufacturer of graphics cards (notably under the ZOTAC, Inno3D, and Manli brands), has seen its growth trajectory restored by the NVIDIA RTX 50 “Blackwell” GPU cycle, with robust earnings recovery and strong own-brand sales momentum.
- Strategic relocation of headquarters to Singapore, SGX secondary listing, and a new plant in Indonesia (Batam) have enhanced operational flexibility, reduced exposure to China-specific risks (including tariffs/export controls), and improved market access.
- The company is expanding beyond gaming GPUs into AI-related computing, GPU servers, and specialty PCs, leveraging its strong NVIDIA partnership and positioning itself to benefit from longer-term trends in AI and hardware innovation.
- Financials reflect a rebound in 2024–2025, with revenue and EPS growth, strong balance sheet (net cash), and an attractive dividend yield (~7%). Valuation remains at a discount to peers, offering compelling upside, with KGI initiating an OUTPERFORM rating and a 12-month target price of SGD\$1.73.
- Key risks include industry cyclicality, GPU supply dependence (primarily on NVIDIA), component cost pressures (especially DRAM), and ongoing geopolitical/regulatory risks. However, the company’s diversified footprint and prudent management mitigate many of these concerns.
- Peer comparison shows PC Partner trading at lower multiples than major Taiwan and Hong Kong hardware firms, despite its improved fundamentals, suggesting potential for multiple expansion as confidence in its recovery builds.
- KGI’s valuation blends Dividend Discount Model, Discounted Cash Flow, and scenario analysis, reflecting both near-term yield appeal and longer-term growth optionality.
Above is an excerpt from a report by KGI Securities (Singapore) Pte. Ltd. Clients of KGI Securities can be the first to access the full report from the KGI Securities website: https://www.kgieworld.com
