Venture Corp: Scaling greater heights
Venture Corporation Ltd’s (VMS) FY17 revenue grew 39.3% to S$4.0b, driven by a diversified revenue base, continuing strong execution of customers’ programmes and deepening of collaborative partnership with strategic customers.
In-line with revenue growth, FY17 operating expenses rose 34.2% to S$3.58b. Consequently, adjusting for one-offs, VMS’ FY17 core PATMI beat our expectations as it jumped 74.5% YoY to S$361.6m, which formed 115% of our estimate.
We believe VMS’ growth will be sustainable given its relentless pursuit to create value through deep collaboration with customers. By providing research & development (R&D) services, VMS has been and we believe will be able to continue to ensure customer stickiness, as well as derive strong sustainable margins.
In addition, we expect VMS’ strategy to continue pursuing deep collaborative alliances with leaders in fast-growing technology domains of interest will result in persistent top-line growth.
Hence, on above expectations FY17, and aforementioned reasons, we adjust our forecasts upwards significantly, as well as roll-forward our valuations.
Source: OCBC