This Stock is +235 year-to-date, yet trades at 40% Discount to Tech Peers on SGX

DBS Group Research has laid out a case for PC Partner, recently trading at $3.10, to have a fair value target of $3.80.

In its Equity Explorer report, analysts Amanda Tan and Ling Lee Keng said: "Our fair value is based on 12x FY27/8 earnings, a c.40% discount to S-tech peers. We use blended FY27/28F earnings to capture rising AI server contribution and potential upside from the next gaming GPU cycle."

PC PARTNER
Share price: $3.00	Fair value: $3.80

First, the economic moat of PC Partner, whose stock has surged 235% year-to-date for a market cap of S$1.2 billion.

Its moat is firmly "anchored in its strategic Nvidia relationship and operational flexibility". This is a partnership that goes way back to 2006.

While the world is facing a profound shortage of high-end GPUs, PC Partner plans to "discontinue low-end models (of VGA cards) and upsell premium own-brand VGA cards to maximise profit per available GPU allocation and lift brand ASPs above USD500".

PCPartner Jensen8.25 At the COMPUTEX 2025 show in Taipei in May 2025, Jensen Huang, CEO of Nvidia, dropped by the booth of Zotac, a brand of PC Partner. Nvidia is a major GPU supplier to PC Partner. Photo: Zotac

As background, PC Partner has shifted to a primary listing on the SGX in August 2025 from HKSE, which "enhances liquidity while removing geopolitical and cost overhangs".

They have also diversified manufacturing to Batam, "effectively ringfencing the group’s US-facing business from tariff uncertainty while preserving continuity of supply".

Next, the balance sheet. PC Partner has a robust financial position, underpinned by a "strong net cash position, with net cash to equity at 35% as of 2H25," DBS notes.

Because of this conservative financial footing, the company is able to reward its owners with a "decent forward dividend yield of 4-5% on an assumed payout of 40%".

As for the company’s future earning power, the analysts point to two primary growth engines: a potential gaming GPU refresh beginning in 2H2027, and the introduction of AI servers.

The AI server business could begin contributing in 2027, built upon a "potential Nvidia qualification in mid-2026".

While the analysts assume that AI server margins will initially be modest at around 10%, they note that given the "substantially higher revenue per unit," this new segment will "support meaningful incremental gross profit even at early scale".

Reasonable price?

Long-time partners

"Long-standing Nvidia partnership and a China-plus-one footprint underpin reliable GPU allocation and resilience to geopolitical and supply-chain disruptions."
-- DBS Research

Is PC Partner trading at a reasonable price?

At 10.0x FY27F earnings, the analysts highlight the valuation is a "c.40% discount to S-Tech" peers.

"Current valuations remain undemanding... leaving room for rerating as earnings visibility improves".

The DBS valuation is built on the assumptions that high component pricing will sustain double-digit revenue growth into FY26 and that the crucial AI server qualification will materialize smoothly by mid-2026.

Takeaway

The risks? The analysts correctly caution that "GPU supply and NVIDIA dependence remain the key input risk," meaning any reduction in GPU allocations would severely impact the business.

Additionally, they warn of execution risk in the new AI server expansion, potential delays in the next gaming GPU upgrade cycle.

And there is the danger that elevated ASPs could end up eroding demand from everyday consumers.

lamp9.25 → See also:PC PARTNER: After 90% profit surge to S$81 million, this company trades at 6X PE and a high yield