Venture

[winston]

not vested

OCBC ups target price for Venture Corp

OCBC Investment Research raised its target price for electronics contract manufacturer Venture Corp Ltd to S$9.22 from S$8.72 and kept its 'buy' rating, on expectations of a recovery in its business next year.

By 0321 GMT, Venture shares fell 0.3 percent to S$7.68, and have jumped 23.9 percent since the start of the year, compared to a 21.9 percent rise in the FTSE ST Industrials Index <.FTFSTAS2000>.

Venture said its third-quarter net profit fell about 8 percent to S$32.6 million from a year earlier, which was weaker than OCBC's expectations due to poor margins.

OCBC highlighted that Venture's management had warned about cautious customer sentiment in light of weak market demand due to macroeconomic uncertainties. The brokerage pared its 2012 revenue and net profit estimates by 1.6 percent and 9.1 percent respectively.

However, OCBC expects Venture to maintain its attractive dividend of 55 Singapore cents a share in the fourth quarter, supported by strong free cashflows.

Source: Reuters

[winston]

not vested

Venture bought back another 7,000 shares at $7.62 yesterday, averaging down from the initial buy back the company did on 9 Nov ’12 (24,000 shares at $7.69).

At 7.2% yield, we maintain our BUY recommendation.


Source: Lim & Tan

[winston]

not vested

Venture Corp: A golden goose for dividends

Venture Corp (VMS) managed to deliver continued sequential improvement in its quarterly results for FY13.

We believe this reflects the recovery momentum of the global economy and consequently VMS’s operations, although FY13 revenue and PATMI still came in 2.4% and 6.1% lower than FY12, respectively.

Given VMS’s strong balance sheet and our free cashflows/share forecast, we believe its FY13 S$0.50 DPS remains a sustainable baseline scenario.

Looking ahead, although we continue to expect FY14 to be a recovery year for VMS, we conservatively trim our revenue forecast by 3.7% as there are still pockets of uncertainty in the global economy.

Coupled with a higher effective tax rate assumption, our FY14 PATMI projection is lowered by 6.0%.

Maintain BUY on VMS, albeit with a reduced fair value estimate of S$7.98 (previously S$8.50), pegged to 15x FY14F EPS.

Source: OCBC

[winston]

not vested

Venture Corp ($7.60, down 2 cents), one of our top pick for this year has done well recently, up 13% from its Feb’14 low of $6.70 and up 6% since the beginning of this year. Compared to the STI’s gain of 3.6% for this year, Venture has outperformed the market by 2.4%. If we add its dividend payment of 50 cents, it would have outperformed even more as at its last traded price, its dividend yield of 6.6% is still superior to that of the STI’s 3.3%.

Venture’s recent outperformance can be attributed to consensus upgrades as a result of

(a) its resumption to growth mode in 1Q2014 with sales up 11% to $591mln and profi t up 10% to $31mln;

(b) a more upbeat assessment of the aggregate outlook from its top 50 customers with average growth expected to be close to 10%;

(c) consensus estimates for their key customers in the corporate sector such as Agilent, HPQ, Oclaro, NCR, Toshiba, Micros Systems, Avago and Waters Corp have been revised upwards by the market recently, suggesting a better outlook for the company;

(d) on the back of better performance and guidance from its key customers, management has turned more upbeat about its 2H2014 outlook.

As a result of the above, there is a chance that Venture may eventually outperform consensus expectations of a 10% profit growth this year to $144mln.

While we continue to like Venture’s fundamentals, we would like to highlight that the stock is approaching an important technical resistance level at $7.65 which is a line connecting the highs of 2011 and 2013. Coupled with its current 14 day RSI index of 82 which is just shy of its all time highs of 85, we believe the stock could see a short-term pull back due to technical reasons.

We would be looking to accumulate the stock on some price weakness on the back of its better 2H2014 as well as still attractive dividend (we expect 50 cents to be declared in Feb’15).

Source: Lim & Tan

[winston]

not vested

Venture Corporation

Growing and differentiating despite adversity.

(VMS SP/BUY/S$8.14/Target: S$8.75)

Venture targets to achieve mid-to-high single-digit growth in top-line and bottom line for 2015.

The operating environment for Venture remains tough with corporations continuing staying lean on capital and IT expenditure.

Source: UOBKH

[winston]

not vested

2 reasons why Venture shares are likely to soar

By Jude Chan

SINGAPORE (July 11): OCBC Investment Research is keeping Venture Corp at “buy” with a higher fair value estimate of $9.35, up from $9.00 previously.

Post-Brexit USD strengthening

With more than 90% of Venture Corp’s revenue denominated in USD, OCBC lead analyst Eugene Chua says an expected strengthening of USD against SGD will likely boost its revenue growth in at least 2H16 and 1H17.

According to forecasts by OCBC treasury research and strategy, USD is expected to further appreciate against SGD to hit 1.4000 by June 17.

“Recall that in 3Q15, when USD saw a 5.6% appreciation against the SGD, about 55% of Venture Corp’s 15.7% y-o-y growth in 3Q15 revenue was attributable to forex movement,” Chua says in a report on July 8.

Malaysia land acquisition

Meanwhile, the electronics manufacturer and provider last week said it completed the acquisition of a 123,706 sqm plot of land in Penang, Malaysia for RM33.3 million ($11.2 million).

(See Venture Corp completes $11 mil Malaysia property acquisition)

“We believe Venture Corp is now better poised for further expansion, especially since it has been acquiring new customers and gaining market share with existing customers over the past few years,” Chua says.

Shares of Venture Corp closed 1.1% higher at $8.67

Source: The Edge

http://smr.theedgemarkets.com/article/2 ... 4-87358173

[winston]

not vested

It's business as usual for this tech company after Brexit

By Gwyneth Yeo

SINGAPORE (July 18): UOB Kay Hian is maintaining its “buy” call for Venture Corporation with a raised target price of $9.82, from $9.25 previously.

UOB Kay Hian’s analyst, Jonathan Koh, noted that Venture’s order flows saw little impact from the Brexit referendum, even though its customers have become more cautious and restrained.

As Koh explains, Venture’s customers had “already toned down their expectations during the market turmoil during January and February and were well aware of potential repercussions from Brexit”.

“More than 80% of Venture’s customers are US-based technology and industrial companies, particularly those headquartered around Silicon Valley,” writes Koh, in a note on Friday. “50% of its products are shipped to the US, 40-45% to Asia Pacific and only 5-10% to Europe.”

On the other hand, it is “business as usual” for the electronic manufacturing services provider, as it secured one new customer for Venture’s networking & communications segment, three new customers for its retail store solutions or industrial segment, and two new customers for test & measurement or life science in 2015.

Koh says that the company’s renewed focus on product development in high-end instrumentation for its existing customers like Keysight, Illumina, Waters and ABB, will also help its business to grow further.

Venture could also stand to benefit from Cavium’s acquisition of its key customer, QLogic, for US$1.36 billion. “Venture is a longstanding supplier to QLogic,” says Koh. “There could be new opportunities for Venture as the combined company expands into data centre and storage space.”

As it stands, Venture has already put in place its plans to expand its business in Malaysia, to take advantage of its established eco-system for manufacturing of high-end electronic products, and the depreciation of the Malaysian ringgit.

The group completed the acquisition of a 30.6-acre land plot at Batu Kawan Industrial Park (Butterworth) for RM33.3million. The 60-year leasehold property will be developed in stages from 2017, as Venture has sufficient production capacity at its existing production facilities, the land plot would.

Furthermore, Koh adds that Venture provides an attractive dividend yield of 5.7%, and has a track record of paying 50 cents per share or more for the past 12 years.

Shares of Venture closed 0.9% lower at $8.85.

Source: The Edge

http://smr.theedgemarkets.com/article/i ... f-87358173

[winston]

Venture posts 20.3% rise in 2Q earnings of $43.4 mil

By Zavier Ong

SINGAPORE (Aug 5): Venture Corporation, the provider of technology services, posted a 20.3% rise in 2Q16 earnings to $43.4 million, up from $36.1 million a year ago.

Revenue rose 3.4% to $683.3 million on the back of what the group described as “value creation and continued improvements in operational excellence across the group’s facilities and its entire value-chain”.

Looking ahead, Venture expects business sentiment to remain varied across the group’s diverse customer-base, providing stability and resilience to its long-term overall performance.

The group says it is well positioned to invest in building greater depth and strengths in engineering and R&D, as well as advanced manufacturing capabilities and supply chain processes.

Shares of Venture Corp closed 0.1% higher at $8.90.

Source: The Edge

http://smr.theedgemarkets.com/article/v ... 9-87358173

[winston]

not vested

Two views on Venture

By Michelle Zhu

SINGAPORE (Aug 8): DBS Vickers Securities is downgrading its “buy” call on Venture Corporation to “hold” with a higher target price of $9.20 from $9 previously, on currency headwinds.

Conversely, OCBC Investment Research is keeping its “buy” recommendation on the group with an unchanged fair value of $9.35.

The technology services provider posted 2Q16 earnings of $43.4 million, a 20.3% increase from $36.1 million a year ago on higher revenue.

(See: Venture posts 20.3% rise in 2Q earnings of $43.4 mil)

In a Monday report, DBS analyst Sachin Mittal says Venture has realised its forex benefits, with further upside limited.

“The strong SGD/MYR and USD/SGD exchange rate in 2H15 implies that there will be no significant y-o-y benefit from currency movements in 2H16,” he notes.

Mittal estimates that a 2% rise in each of the SGD/MYR and USD/SGD exchange rates will have a respective 1.5% and 2% positive impact on the group’s earnings.

He points out that SGD/MYR has “remained stable” around $2.98 since 3Q15. On the other hand, SGD/USD has declined 4% below the average level seen in 2H15.

In addition, Venture’s management has guided for a “mixed outlook from its diverse customer base”. As such, DBS now projects the group’s 2H16 earnings to register low-single digit growth y-o-y.

OCBC analysts Eugene Chua and Jodie Foo think otherwise.

“We expect Venture’s steady growth momentum to continue, driven by its key focus on creating value for customers, as Venture invests and strengthens its research and development (R&D) capabilities,” say Chua and Foo.

They add that Venture’s ability to develop new products while improving existing products will allow the group’s manufacturing business to grow on improved margins with each successful product.

“As Venture continues to invest appropriately in new equipment when necessary to drive productivity, we believe its ability to produce more products efficiently with lower headcount will also drive sustainable growth ahead,” they assert.

Looking ahead, Foo and Chua think Venture’s medical & life sciences customers will drive the group’s “next up-and-coming growth”.

(See: ‘Bright earnings prospects’ for Venture Corp)

As at 12.13pm, shares of Venture Corp are trading 1.01% higher at $8.99.

Source: The Edge

http://smr.theedgemarkets.com/article/t ... 1-87358173

[winston]

not vested

Two views on Venture

By Michelle Zhu

SINGAPORE (Aug 8): DBS Vickers Securities is downgrading its “buy” call on Venture Corporation to “hold” with a higher target price of $9.20 from $9 previously, on currency headwinds.

Conversely, OCBC Investment Research is keeping its “buy” recommendation on the group with an unchanged fair value of $9.35.

The technology services provider posted 2Q16 earnings of $43.4 million, a 20.3% increase from $36.1 million a year ago on higher revenue.

(See: Venture posts 20.3% rise in 2Q earnings of $43.4 mil)

In a Monday report, DBS analyst Sachin Mittal says Venture has realised its forex benefits, with further upside limited.

“The strong SGD/MYR and USD/SGD exchange rate in 2H15 implies that there will be no significant y-o-y benefit from currency movements in 2H16,” he notes.

Mittal estimates that a 2% rise in each of the SGD/MYR and USD/SGD exchange rates will have a respective 1.5% and 2% positive impact on the group’s earnings.

He points out that SGD/MYR has “remained stable” around $2.98 since 3Q15. On the other hand, SGD/USD has declined 4% below the average level seen in 2H15.

In addition, Venture’s management has guided for a “mixed outlook from its diverse customer base”. As such, DBS now projects the group’s 2H16 earnings to register low-single digit growth y-o-y.

OCBC analysts Eugene Chua and Jodie Foo think otherwise.

“We expect Venture’s steady growth momentum to continue, driven by its key focus on creating value for customers, as Venture invests and strengthens its research and development (R&D) capabilities,” say Chua and Foo.

They add that Venture’s ability to develop new products while improving existing products will allow the group’s manufacturing business to grow on improved margins with each successful product.

“As Venture continues to invest appropriately in new equipment when necessary to drive productivity, we believe its ability to produce more products efficiently with lower headcount will also drive sustainable growth ahead,” they assert.

Looking ahead, Foo and Chua think Venture’s medical & life sciences customers will drive the group’s “next up-and-coming growth”.

(See: ‘Bright earnings prospects’ for Venture Corp)

As at 12.13pm, shares of Venture Corp are trading 1.01% higher at $8.99.

Source: The Edge

http://smr.theedgemarkets.com/article/t ... 1-87358173