Aztech Global (SGX: 8AZ) Crashes 62% – What Went Wrong and Is It Time to Bottom-Fish?

Hi Folks, welcome back to Investment Income for Life. Today we are looking at a stock with high dividend yield that some investors in Singapore have owned at some point: Aztech Global (SGX: 8AZ). I have previously warned against buying this stock at S$1.28 during its IPO back in March 2021- please refer to this previous post. As at 29 October 2026, the share price has plunged from around S$1.06 to just S$0.40, a drop of roughly 62%. For a counter that was once a darling of yield hunters, that is a brutal re-rating. Let's quickly unpack what happened.

Price Chart Trending of Aztech Global Since IPO- Gone with the Wind

1. Severe Revenue and Profit Contraction
The market aggressively re-priced the stock after a string of weak financial updates. The latest Q3 2026 business update confirmed that the tech slowdown is biting hard:

•       Top-line collapse: Q3 2026 revenue plummeted 39.8% year-on-year to S$80.4 million.

•       Profit plunge: Q3 2026 net profit also fell 39.8% to S$6.5 million.

•       Nine-month picture: Cumulative net profit for 9M 2026 cratered 40.9% to S$15.9 million.

This came on the back of an already weak first half, where revenue fell 18.4% to S$151.4 million and net profit dropped 41.7% to S$9.4 million. And note that the 1H number was flattered by a one-off S$2.5 million gain from selling a property in Dongguan, China. Strip that out and core earnings look even thinner.

2. Cyclical Downturn in IoT and Smart Home Demand
Aztech is essentially an electronics manufacturing services (EMS) player that designs and builds IoT devices, smart home products and data-communication equipment for global brand owners. When consumer electronics demand softens, Aztech feels it almost immediately.

Key customers have delayed product launches and cut order volumes on existing programmes. Management had already flagged softer demand for 2H 2026 back in July, warning that new projects were unlikely to fully offset lower volumes from existing customers. The Q3 numbers show that warning was, if anything, understated.

Past 12mths Market Price

3. Tighter Competition and Pricing Power Issues
Contract manufacturing is a tough business. Aztech faced stiffer competition and had to accept lower pricing to keep volumes flowing, which squeezed margins. Net profit margin in 2Q 2026 was just 6.2%, down from 10.2% a year earlier.

Currency was another headwind. In the first half alone, Aztech booked a S$2.8 million foreign exchange loss due to the weaker US Dollar. Since most of its sales are in USD while it reports in SGD, a soft greenback directly erodes the bottom line.

4. Severe Analyst Downgrades and Valuation Adjustments
With little visibility on FY2027 earnings, the research houses turned decisively bearish:

•       DBS Group Research halved its target price from S$0.66 to S$0.33 in October 2026, maintaining a "Fully Valued" (Sell) call.

•       Consensus EPS estimates for FY2026 were slashed from S$0.057 to just S$0.023.

When earnings estimates get cut by more than half, the share price usually follows. That is exactly what we have seen here.

5. Unsustainable Dividend Yield Fears
This is the part that hurts income investors the most. Aztech entered this cycle sporting a headline trailing yield of close to 30%, boosted by generous special dividends paid out of its big cash pile in earlier years. But a trailing yield only tells you what was paid, not what will be paid.

With profits shrinking and free cash flow no longer comfortably covering such heavy payouts, the market quickly priced in a dividend cut. The interim dividend for 1H 2026 was just 0.5 cent per share, half of the 1 cent paid for 1H 2025. Income-focused holders rushed for the exit, adding fuel to the sell-off.

6. Is There Any Silver Lining?
To be fair, Aztech is not a company in financial distress. As at 30 June 2026, it still had a net cash position of about S$190.6 million. With roughly 772 million shares outstanding, that works out to around S$0.25 per share in net cash. At S$0.40, close to 60% of the share price is backed by cash on the balance sheet.

The company also remains profitable and has been winning new projects and customers in areas like MedTech, security and industrial segments. So the business is not broken; it is shrinking in a cyclical downturn.

7. Parting Thoughts
My personal thought and concern here is that Aztech’s past substantial owners have this habit of offering to take the company private using a low-ball offer and then after a few years, they will re-list part or all of the business in another form. With the huge plunge, the current low share price may become a target to do a buy-over at the worst possible time & price. I will continue to stay far far away from this stock.

Ok folks, that's all from me today. Have a great week ahead!

Disclaimer: This post is for educational purposes only and is not a recommendation to buy or sell any security. Please do your own due diligence or consult a licensed financial adviser before investing.

Aztech Global Disastrous Financial Performance and Share Price Since IPO.

Aztech Global listed in March 2021 at S$1.28 per share. Its current share price has plunged by a jaw dropping -47% to S$0.675 per share since IPO. I can't help but feel a sense of Deja Vu as Aztech reminded me of the many short drama plots about "Reborn" and reliving a previous life. Back in March 8, 2021, I have posted a blog on 5 reasons on why I will be giving this IPO a miss. Given that Aztech just recently announced a -21.2% drop in net profit to S$10.8Mil for 3rd quarter ending September 30, 2025 as well as declining revenue for 3rd quarter with a horrendous -19.9% plunge to S$133.5Mil from S$166.7Mil, the probability of it following the old playbook of privatising at a huge discount seems to be imminent (personal thoughts only).  

Aztech is another classic example of why retail investors should not be too fixated on high dividend (7%-8%) yield without considering other business factors such as type of business and associated risks as well as track record of management team.

Investment Portfolios Updates (27 June 2025) - Net Investment of S$750K and Projected Annualised Passive Income of S$46K.

Singapore REITs suddenly sprang back to life with the anticpation of 2 more rate cuts in 2nd half of FY2025. More funds also moved from overseas markets into the local SGX. My gross portfolio managed to hit the above S$1.02Mil mark again albeit the see-saw ride from Donald Trump's erratic policies from import tariff fight with other countries (the most recent one is with Canada and sending US airforce to bomb Iran). Net investment (including cash) is approximately S$750K as at 27 June 2025. I guess this is not bad considering that I had cashed out S$10k from my unit trust bond funds for personal expenses usage.

1. Portfolio 1- Stocks Held in SGX Central Depository 

2. Portfolio 2- Margin Purchased Securities

(Note: My margin purchased securities has grown to a sufficient scale to sustain itself and can pay off annual financing charges as well as to gradually pay down the margin loan through dividends generated.) 

Have continued paying down my margin loan from S$272K to S$267K. Going forward, will target to bring the margin loan utilisation down to S$250k hopefully by year end in case Donald Trump screw up the world economies again.

In addition, I have also sold off part of my Keppel Corp stocks (1,000 shares) as its price hit over S$7.35 per share to recycle the capital into Alibaba (9988).

3. Portfolio 3 (with Tiger Brokers and MooMoo) 

(Venture into higher risk as well as capital growth stocks here)

I have added 400 shares of Alibaba when its price drop back to HKD110- HKD113 range over the past few months as it is now a cloud and also AI tech play on top of its usual core E-commerce business.

Also added 10,000 units of Lendlease Commercial REIT in end May 2025 when its price plunged to S$0.480 per unit. Its price has since recovered to S$0.525 per unit as at 27 June 2025.

4. Portfolio 4 (Endowus Unit Trusts & Other Investments)

I have taken out S$10K from my Higher Income Endowus portfolio for personal usage. Also did a bit of rebalancing and direct purchase of PIMCO bond fund as well as Pine Bridge Asia Pacific fixed income fund. 

In addition, decided to buy into the Fidelity APAC Dividend Fund to to reduce US equities exposure in my unit trusts portfolio as US market is way overvalued (near 52 weeks high and extremely high PE ratio for many US firms) right now. 

Parting Thoughts

I am keeping my fingers crossed that there will be at least 2 more rate cuts this year so that interest rates go down and REITs continue to increase their distributions.

Aztech Global IPO- 5 Reasons Why I Am Giving It A MISS!

Aztech is back again with a new IPO of its "Internet of Things ("IoT") & Data Communication products,  LED lighting products and Kitchen appliances electronic manufacturing business this time. Why did I use "back again"? Well, Aztech was previously listed on the SGX before getting privatized in a not too fantastic deal on 20 September 2016. Aztech's share price had fallen drastically from S$1 per share in May 2015 to S$0.32 per share on 16 September 2016. The Aztech Group was then subsequently taken private with the co-founder and CEO offering a S$0.42 per share. I have a personal bad feel about management buying out retail investors at a low price and then repackaging a few years later to come back with an IPO at S$1.20 per share. What if the same tragedy happens again?

I will just do a quick sum up of my personal thoughts on why I am avoiding Aztech Global Ltd:

1. Aztech Global has disclosed the key business risk that its manufacturing facility in Dongguan do not have the necessary certification in right of use which may lead to disruption in supply and also potential breach of contract for late delivery due to the potential disruption.
Wow, this is an extremely risky event and a bad omen to kick off the IPO with no better certainty. Shouldn't Aztech Global delay the IPO till this issue has been settled? They seemed desperate to launch the IPO to raise funds. 

2. Risk of Illiquid Shares- Deja Vu of what happened in the previous Aztech Group version. 

There is a possibility that even if one wanted to sell the stocks, there will not be sufficient buyers just like the good old days a few years back in another listed company called Aztech Group before it was privatized cheaply. 

3.  Strange low NTA of S$0.2598 per share post IPO share capital of 773,720,000 shares relative to IPO asking price of S$1.20 per share.

This is the weird part. Aztech Global's NTA per share is only S$0.2598 relative to IPO price of S$1.28 per share. In the case of immediate liquidation, it's a huge drop in recoverable amount. I am unable to ascertain whether this was due to investment property at historical issue and not marked up to fair market valuation.

 

4. Customer concentration risk and unknown customers to assess quality of clients and potential bad debt

The customers here are very secretive. While this is fine due to commercial and operational rationale, it does not appear transparent or informative for assessment on credit risk especially when these 3 top customers made up such a huge chunk of Aztech Global's revenue generation. 

5. Kay Lee Roast Meat acquisition did not workout in 2014- From Targeted 10 Kay Lee Restaurants to only 1 outlet

Aztech used to venture into F&B businesses. It made headlines in 2014 when it bought over the secret recipe of their roast meat and premises from Ha Wai Kay and Betty Kong for a whopping S$4Mil. The biggest Kay Lee restaurant opened in Suntec City which could seat 100 diners anytime. However, all Kay Lee Restaurants had since folded with only the original one at Upper Paya Lebar Road.

Now you may ask what has roast meat got to do with this IPO being good or not? Well, my personal thoughts are that it does matter. It depicted the track record of building up a new business by the Aztech management team.

Parting Thoughts:
The Aztech Global new IPO will cut off by 12pm, 10 March 2021. Based on the above, I will be staying far far away from this IPO.