The depressed HK markets triggered another buy, this time PC Partner Group. PCP is an OEM of computer parts, especially graphics cards. They’ve actually manufactured the graphics card (Zotac card) on the very PC I’m writing this.
PCP is trading at 0.42 NCAV. I see three reasons the company has such a depressed valuation.
- Personal computers are in decline
- They are tied up in litigation
- Asset/liabilities ratio is not very good.
Interestingly PCP has had a good run over the last years due to a graphics card boom, due to bitcoin mining. However, now the bitcoin miners have turned to other solutions – such as custom integrated circuits.