Venture

[behappyalways]

Venture Corp reports 3QFY20 earnings of $80.2 million, down 5.9% y-o-y
https://www.theedgesingapore.com/news/r ... n-59-y-o-y

[winston]

not vested

Venture Corporation (VMS SP)
3Q20: Results In Line; Sequential Recovery Demonstrates Resilience

3Q20 net profit fell 6% yoy (+14% qoq), with 9M20 forming 71% of our full-year estimate.

Sequential recovery continued in 3Q20 due to:
a) further reopening of economies; and
b) better demand for customers’ essential products.

4Q20 should continue to enjoy qoq sequential recovery.

New products are expected to be launched in 2021, and demand for key segments (medical devices, networking and semiconductor) appears unabated.

Maintain BUY and target price of S$23.76 (19.4x 2021F EPS, +1SD of mean).

Source: UOBKH

https://research.uobkayhian.com/content ... f3d0ec141f

[winston]

not vested

When stars align

3Q20 PATMI of SGD80.2m (-5.9% YoY, +14% QoQ) was within our expectation but marginally below street’s.

Several end-markets are recovering well, and VMS and customers’ are optimistic towards new products and pipeline.

Such signs typically lead to an earnings upgrade cycle.

As such we U/G VMS to BUY, now on 18.5x FY21E P/E, from 2x FY21E P/B previously.

TP: Sin$23.37

Source: KE

https://factsetpdf.maybank-ke.com/PDF/1 ... 4c546d.pdf

[winston]

not vested

Venture Corporation
Is a re-rating on the cards?

Some of Venture’s customers reported results recently. We think new product launches by customers could possibly lift Venture’s FY22F net profit.

Venture provided a 3Q business update on 6 Nov 2020. 3Q20 net profit was in line with our and consensus’ forecasts.

With an estimated 15.4% average net profit growth over FY21-22F, we raise our P/E peg to 18.5x on FY21F EPS, leading to a higher TP of S$24.84.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... BCB72FA73E

[winston]

not vested

What’s New

3Q20 results up for the second consecutive quarter but net margins dipped below 10%

Expecting another quarterly growth in 4Q but at a more muted rate

Demand momentum to remain strong in FY21; launch of new products a key driver

Maintain BUY and raising our TP to S$24.30, pegged to a higher PE of 20.3x as sector continues to re-rate.

Source: DBS

https://researchwise.dbsvresearch.com/R ... =fiechkhaa

[winston]

not vested

SEQUENTIAL RECOVERY

Resilient 3Q20; 14% QoQ growth in net profit
Solid balance sheet with net cash position of S$830m
Encouraging outlook next year

Venture Corporation Ltd’s (Venture) 3Q20 revenue fell 6% YoY to S$818.m, though this represented a sequential QoQ improvement of 18%.

This QoQ recovery arose from Venture’s broad-based growth across its portfolios of technology domains.

PBT margin was resilient at 11.3% (flat YoY) despite the operating landscape.

Net profit for 3Q20 fell 6% YoY to S$80.2m, which formed ~24% of our full-year estimate, which we deem to be broadly in-line with expectations.

Venture continues well on its path of recovery, with the group expecting a stronger 2H20 compared to 1H20, assuming lockdowns and disruptions do not escalate further.

We note that new productions and solutions engineered and developed by Venture’s R&D labs are scheduled for release into the end-markets during 1H and 2H of 2021 by its partners and customers in several technology domains.

Venture believes that it will be able to expand its participation in selected technology domains and ecosystems through the diversity of its capabilities, technical skills and expertise.

Source: OCBC

[winston]

not vested

Earnings inflection

We believe recovering end-markets and customers’ buoyant mood towards new products and pipeline, create favourable conditions for an earnings upgrade cycle in FY21E, as VMS launches new products across several domains.

Potential upside drivers include stronger than expected momentum and positive margin surprise from deepening engagement with customers, in our view.

Maintain BUY with TP of SGD23.27 (18.5x FY21E P/E).

Source: KE

https://factsetpdf.maybank-ke.com/PDF/2 ... 3de5d7.pdf

[winston]

not vested

Maintain BUY and SGD22.60 TP, 17% upside and c.4% yield.

Venture Corp has continued its recovery trajectory (NPAT: +14.2% YoY), in line with
our estimates.

Management expects to deliver a stronger 2H20 vs 1H20 – provided COVID-19-induced lockdowns and disruptions do not deteriorate further.

The group is currently fulfilling its backlog of existing orders while its research & development (R&D) labs have plans to subsequently release a number of newly developed products into manufacturing early 2021.

Source: RHB

https://research.rhbtradesmart.com/view ... 5091b3bad8

[winston]

not vested

“VMS has guided that new products/solutions engineered and developed in its research and development (R&D) labs are scheduled for release into the end-markets in FY2021F by its partners and customers in several technology domains,” says Tng of CIMB.

“We think 1QFY2021F net profit will grow y-o-y as 1QFY2020 net profit was affected by lockdowns relating to the Covid-19 pandemic,” he adds.

“We believe VMS can achieve average earnings per share (EPS) growth of 15.4% over FY21-22F, hence our price-to-earnings (P/E) peg of 18.5x (0.5 standard deviation or s.d. above its 14-year average of 15x), on FY21F EPS, leading to a target price of $24.84,” says Tng, who has rated VMS at “add”.

Source: CIMB

[winston]

not vested

Venture Corporation (VMS SP)
Results Preview And Potential Risks For 2021

We expect 2020 earnings to be largely in line with our estimate of S$300m as sequential
recovery continues into 4Q20 from further reopening of economies and good demand
for customers’ essential products.

However, we see three potential key risks for 2021:
a) delay of new product launches due to weaker market sentiment,
b) production disruption due to COVID-19 outbreak in Malaysia, and
c) reduced demand for essential products linked to COVID-19.

Maintain BUY and target price of S$23.76.

Source: UOBKH

https://research.uobkayhian.com/content ... ccaa6a955d