Venture

[winston]

not vested

Venture Corporation Ltd - Disrupted quarter

Recommendation: NEUTRAL (Maintained); TP S$19.20, Last close: S$18.95;

Results were below forecast. 3Q21 PATMI declined 4% YoY to S$77mn. YTD21 Revenue and PATMI were 66% and 63% respectively.

Fulfilment of customer orders disrupted by global components shortages and the Extended Movement Control Order (or factory closures) in Malaysia.

We are lowering our FY21e revenue and PATMI by 6% and 10% respectively.

Recovery this quarter has been stalled due to production disruptions.

The company mentioned that demand is healthy and broad-based demand.

In addition, the workforce in Malaysia is almost fully vaccinated, which should allow manufacturing activities to resume as normal.

We expect some spill-over of orders into 4Q21.

We maintain our NEUTRAL recommendation. Our target price is rolled over to 16x PE FY22e, its 5-year average.

Re-opening and removal of lockdown should ease pressure on the supply chain in FY22e. The share price is currently supported by dividend yields of 4.5%, 11% ROEs and S$853mn net cash.

Source: Phillips

https://internetfileserver.phillip.com. ... 211105.pdf

[winston]

not vested

Venture Corporation (VMS SP): Stronger earnings from 4Q onwards [BUY, TP: S$22.60]

3Q21 below expectations despite strong demand, dragged by supply chain disruptions

Commendable 3Q21 net margin of 10%; 9-month at 9.9%

Expect a better 4Q21 and a stronger year ahead, on easing of supply chain disruptions and strong order momentum

Tweaked FY21F/FY22F earnings by -4%/+1%; maintain BUY with lower TP of S$22.60

Source: DBS

[winston]

not vested

Venture Corporation (VMS SP) - Positive outlook despite supply constraints in 3Q21

Venture Corporation Ltd’s (Venture) 9M21 results came in under expectations.

Fulfilment of strong demand from customers/partners in 3Q21 was hampered by the global components shortages and the Extended Movement Control Order in Malaysia (from June 2021).

9M21 net profit of SGD217.4m was ~67% that of consensus.

On the issue of sporadic lockdowns, we note that most of Venture’s employees (if not all) were able to return to work since Sep 2021, given more than 92% of Venture’s employees were fully vaccinated, while more than 96% of workforce in Malaysia were fully vaccinated by end-Sep21.

Venture is also separately focused on various pathways to secure delinquent parts/components.

The company notes that the demand/forecast for the group’s services, products and solutions were healthy and broad-based in 3Q21, and expects this positive trend to continue for the next 12 months.

Alongside other leadership changes, Venture has also recently announced that Mr. Wong Ngit Liong will be stepping down as CEO while remaining as the Executive Chairman of the Board.

Following adjustments, we roll forward our valuations, and after applying a target P/E of 18.17x (inclusive of a 15% ESG premium following its rating upgrade), our FV eases from SGD21.66 to SGD21.07. BUY.

Source: OCBC

[winston]

not vested

Venture Corporation (VMS SP)
Healthy Customers’ Results And Improved Production Indicate A Robust 4Q21

We expect VMS to report 4Q21 earnings of S$79.5m (-8% yoy, +3% qoq), below
consensus’s estimate of S$91.4m (+6% yoy, +19% qoq).

We think our 4Q21 earnings estimate may be too conservative due to:
a) healthy results and outlook of all VMS’ customers which have reported their 4Q21 results,
b) relaxed restrictions since Sep 21 which allowed the majority of VMS’ workers to return to work, and
c) positive signals from insider share purchases.

Maintain BUY and target price of S$22.04.

Source: UOBKH

https://research.uobkayhian.com/content ... 38e1b10a59

[behappyalways]

Venture Corp improves 2HFY2021 earnings to $171.7 mil, to pay final dividend of 50 cents
https://www.theedgesingapore.com/capita ... d-50-cents

[winston]

not vested

Risk reward improves
U/G to BUY as FY22E growth accelerates

VMS’ 2H21 PATMI of SGD171.7m (+3% YoY, +22.3% HoH) met the street’s expectations and beat ours.

We raise our FY22-23E PATMI by 10% as supply side bottlenecks are easing faster than we expected.

This, coupled with a robust demand outlook, should catalyse an acceleration in earnings growth and help the stock rerate higher.

We U/G to BUY from HOLD, and our TP is 9% higher at SGD21.00 (17.2x P/E, implying 0.5SD above LT mean).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/253485.pdf

[winston]

not vested

Venture Corporation Ltd – Robust demand but shortages persist

Source: Phillips

https://www.stocksbnb.com/reports/ventu ... s-persist/

[winston]

not vested

A year of recovery

FY21 results were in line with our/Bloomberg consensus full-year expectations as operations normalised in 4Q21.

Despite the operating challenges, the company continued to work on defending its pretax and net profit margins (FY21: 11.6%/10.0%).

A final DPS of S$0.50 (unchanged yoy) was declared.

Reiterate Add with an unchanged TP of S$23.32 as EPS growth (15.2% yoy) returns in FY22F.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... AAD16E3DF2

[winston]

not vested

Venture Corporation (VMS SP)
2021: Results Above Expectations; Robust Customers’ Outlook

VMS’s 2021 earnings of S$312m (+5% yoy) beat our expectation by 5%.

4Q21 recorded a strong growth of 23% qoq due to improvement in component shortages, resumption of full labour force and fulfilment of backlog orders.

VMS anticipates a robust demand outlook based on customers’ orders and forecasts across various technology domains.

As a result, we raise our 2022 and 2023 EPS forecasts by 4%.

Maintain BUY with a 4% higher target price of S$22.80 (pegged to +1SD, 19.5x 2022F PE).

Source: UOBKH

https://research.uobkayhian.com/content ... f4a68a915a

[winston]

not vested

ROBUST UNDERLYING DEMAND ACROSS A NUMBER OF DOMAINS.

4Q21 above expectations; full-year DPS of 75 S cents

Improving supply situation though challenges remain; 200k share purchase by Chairman in Nov’21

FV of SGD19.66

Venture Corporation Ltd’s (Venture) 4Q21 profit grew 10% YoY to SGD95m, thus bringing full-year profit to SGD312m, which comes in slightly above expectations.

Net margin for the quarter was also at a commendable level of 10.5%.

Venture declared a final DPS of 50 S cents, bringing full-year DPS to 75 S cents.

Venture noted that the improving supply situation was thanks to the taskforces that were set up previously to manage its global supply base, and to secure parts and components to meet shipment plans.

However, we understand that there remain challenges in fulfilling all shipments in 4Q21, so some backlog has been pushed to 1Q22, while component shortages are yet to be fully resolved.

Nonetheless, strong underlying demand is still observed across a number of tech domains.

Management has also shared that it is developing a roadmap to make further inroads into the semiconductor value chain as it observes significant growth opportunities ahead given the structural longer-term demand.

We also note that Mr. Wong Ngit Liong (Executive Chairman) also previously purchased 200k shares back in Nov-2021 at ~SGD18.73 each, which we believe reflects his confidence in the group’s longer-term prospects.

While the above are broadly encouraging, we choose to adopt a more conservative target P/E multiple of 16.6x (5-year mean, inclusive of a 15% ESG premium) to cater for valuation multiple compression across tech names and geopolitically-driven supply chain concerns. Coupled with other adjustments, our FV eases from SGD21.07 to SGD19.66.

Source: OCBC