CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Are Razer shares worth buying?

Gaming hardware maker Razer’s shares took a hit from the impending closure of its costly e-wallet business, but analysts are still bullish on the stock.

  • Razer (HK: 1337) share price falls to HK1.85 per share
  • It played down the impact of ending its e-wallet service
  • As revenue soared, Razer returned to profitability in H1 2021
  • Analysts see a potential 84% upside on the stock
  • Keen to trade Razer shares? Open an account with us to start trading now.

Razer stock price: what’s the latest?

Shares of Singaporean startup Razer, which primarily makes consumer electronics and gaming hardware such as laptops, tumbled 2.1% to close at HK1.85 on Thursday. About 15.7 million shares changed hands.

Razer’s encouraging half-year results had helped lift the stock price briefly, but news of its e-wallet shutdown subsequently weighed on the share performance.

Year-to-date, the Hong Kong-listed counter has fallen nearly 28%.

As of Thursday morning, all six analysts covering the stock recommended ‘buy’, and eyed an average 12-month target price of HK$3.41, Bloomberg data showed. That implied a potential upside of 84% based on Thursday’s closing price.

Credit Suisse’s research team on Wednesday gave an ‘outperform’ rating and a HK$3.25 target, while HSBC suggested ‘buy’ and targeted HK$3.00 per share.

Why did Razer exit the e-wallet scene?

The gaming hardware and software manufacturer, dual-headquartered in California and Singapore, told the 1.1 million users of Razer Pay that the group would end the e-wallet service at the end of September 2021.

Nikkei reported that the withdrawal ‘comes as the high costs of customer acquisition weigh on operators’.

Lee Li Meng, Razer’s head of fintech, said the e-wallet business involved ‘a huge amount of’ cash burn, especially in Southeast Asia. He added that the service’s closure will only have a small impact on revenue.

Razer plans to narrow its focus to business-to-business digital payments.

Zennon Kapron from fintech research firm Kapronasia opined that persuading existing Razer users and new users to use the e-wallet service ‘would have been incredibly challenging and expensive, especially as gaming doesn’t naturally tie into spending money…in a convenience store or buying groceries online’.

Start trading Razer shares today

Go long or short with CFDs on Razer and 16,000+ shares with our award-winning platform.* Perfect your technique with S$200,000 worth of virtual funds in your free demo account. Create a free demo account here.

* Awarded the Best Online Trading Platform by Influential Brands in 2021.

Razer swings to profitability in 1H 2021

On Wednesday, Razer reported revenue climbed 68% year-on-year to a record US$752 million for the first six months of 2021.

The hardware arm’s revenue jumped 77% to US$677.3 million, while new gaming growth categories gained further market share, such as in broadcast and gaming chairs.

Net profit totalled US$31.3 million, reversing from a net loss of US$17.7 million in the year-ago period. This was boosted by the revenue surge, continued increase in gross margin, and improved productivity.

The company said it expects strong revenue growth for 2021 amid new hardware product introductions and growth of its software user base.

It will also amp up investments for growth, such as by reinvesting part of its full-year profits into high-potential areas like Razer Fintech and its virtual-credits service Razer Gold, as well as step-up investments in new growth opportunities.

‘Such investments will involve additional spending in operational expenses as we scale our services business,’ Razer said.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.