The group is a manufacturer of NVIDIA-powered video graphics cards, operating under the ZOTAC, Inno3D and Manli brands.
Previously located in Hong Kong, PC Partner relocated to Singapore in late 2024, establishing a new headquarters in the nation’s Mapletree Business City and a manufacturing facility in Batam, Indonesia.
“This strategic pivot was critical in securing access to NVIDIA's flagship RTX 5090 GPUs, which are restricted under US export controls for Greater China-domiciled entities,” writes Chao.
He adds: “Importantly, the current RTX 5090 supply crisis may drive further margin expansion beyond the 10.5% achieved in the 1HFY2025, as scarcity creates pricing power for Tier-1 AIB partners.”
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The company announced a positive profit alert on Jan 20, guiding for a FY2025 net profit of around HK$450 million ($73.4 million), an increase of 72% y-o-y, driven by a strong RTX 50 series demand.
According to Chao, the current RTX 50 series faces “one of the worst” GPU availability crises since the 2021 cryptocurrency boom. As a tier-1 NVIDIA AIB partner with NVIDIA Partner Network membership secured in the 1HFY2025, he sees that PC Partner “likely receives priority allocation” during this shortage.
On this, he notes: “However, we believe the market has yet to fully appreciate three critical factors: the severity of the current RTX 5090 supply crisis that favours established Tier-1 AIB partners; the emerging dual demand streams from gaming and AI applications; and the strategic value of Singapore domicile amid intensifying US-China technology decoupling.”
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At current prices, PC Partner trades at just 6.9 times FY2025E P/E with a prospective dividend yield of 5.7%, supported by a robust net cash position of HK$1.04 billion.
“The all-time high equivalent of $2.93 (HK$17.96 in December 2021) provides a reference point for upside potential in a true supercycle scenario,” writes Chao.
With regards to the company’s conversion to listing in Singapore, the analyst notes that the listing was “instrumental” in restoring PC Partner's access to NVIDIA's flagship RTX 5090 GPU, which had been restricted for Hong Kong-domiciled entities.
He writes: “This regulatory de-risking positions PC Partner to capture premium-tier demand in the growing gaming and artificial intelligence (AI) personal commuter (PC) markets without supply access constraints.”
The company’s new Batam facility is another point of strength, as it enables the manufacturing of products outside China, providing flexibility to serve US customers without incremental tariffs.
Near-term catalysts noted by Chao include the group’s upcoming FY2025 results and potential upside surprise, the expect final dividend of HK$0.15 to HK$0.20 per share, enhancing the total FY2025 yield to 5.7%, additional RTX 50 series stock keeping units to drive 2HFY2025 and FY2026 volumes, improved production efficiency and tariff-mitigation benefits as facility scales at its Indonesia facility and lastly, continued GDDR7 shortages and TSMC capacity constraints which would then favour tier-1 partners with priority allocation.
Shares in PC Partner closed two cents lower or 1.48% down at $1.33 on Feb 6.
