Venture

[winston]

Venturing into a 2H20 recovery

Earnings inflection in sight; upgrade to BUY

VMS’ customers appear more positive towards 2020 than 2019, from both company specific factors (e.g. new products) and their assessment of end-markets.

As such, we raise FY20-21E EPS by 6-8% (broadly in line with FactSet consensus), and raise ROE-g/COE-g TP to SGD18.23, now based on 2.0x FY20E P/B (prev: 1.8x).

Referencing history, sustained improvement in macro conditions may present upside risk to consensus EPS estimates.

VMS is trading at an undemanding 12.7x FY20E P/E and 4% yield.

Source: Kim Eng

https://www.kelive.com/KimEng/servlet/P ... &rid=51418

[winston]

not vested

Venture Corporation (VMS SP)
Expect Better Prospects Backed By 4.2% Yield; Upgrade To BUY

We expect an earnings recovery for Venture in 2020, from potential new product launches and stabilisation in the earnings of its clients.

The COVID 19 outbreak’s impact on its business operations will be limited compared with other listed EMS companies in Singapore, making it a more defensive play.

Furthermore, Venture has a solid net cash position and offers an attractive 2020 dividend yield of 4.2%.

We upgrade to BUY with an 18% higher target price of S$19.62 (15.4x 2020F PE).

Source: UOBKH

https://research.uobkayhian.com/content ... c3e8778513

[winston]

not vested

Venture Corp (VMS SP, BUY, TP: SGD19.30) – UPGRADE
Time For a Positive Rerating

Results Preview

Upgrade to BUY from Neutral, with a higher TP of SGD19.30 from SGD16.30, a 14.9% upside plus a 4% yield.

Venture Corp reported a decent 3Q19 which – combined with lowered tensions between the US and China after the conclusion of the Phase 1 deal – make us expect its ramp up in projects in 4Q19 and 1Q20 to be successful.

We think the stock performance over the next quarters could outperform Street’s expectations.

We lift our FY19 and 20F NPAT estimates by 3% and 5% and roll over our TP to FY20F, based on a 15x P/E.

Source: RHB

https://research.rhbtradesmart.com/atta ... 9c9e68.pdf

[winston]

not vested

Venture - Positioned to benefit (VMS SP, CP SGD16.51, BUY, TP SGD18.23, Technology)

4Q19 net profit fell 10.6% YoY to SGD96.2m amid a challenging operating environment, but was still a beat.

VMS expects to largely fulfil 1Q20 backlog in 2Q20, and also expects a stronger 2H20, supported by new and existing customers.

MKE D-Lab recently conducted a sentiment poll, which suggests that investors are broadly bullish on VMS’ share price performance in 2020.

Our forecasts, BUY rating, and ROE-g/COE-g TP of SGD18.23 (2x FY20E P/B) are maintained.

Source: Kim Eng

https://www.kelive.com/KimEng/servlet/P ... &rid=51678

[winston]

not vested

Anticipating a stronger 2H

4Q19/FY19 core net profit were in line, at 26%/102% of our and consensus’ full-year forecasts. Final DPS of S$0.50 in line with our expectation.

The company sees both risks and opportunities from the Covid-19 outbreak and is guiding for a stronger 2H20 as customers launch new products.

Upgrade to Add from Hold, with a higher TP of S$17.66, given the positive earnings guidance.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 6A9579BE78

[winston]

not vested

Venture Corporation (VMS SP)
4Q19: Above Expectations; Well Positioned To Capture New Opportunities

Venture’s 4Q19 net profit (+13% qoq) beat our and consensus expectations by 10%,
with 2019 accounting for 103% of both full-year forecasts.

Outlook is positive, with Venture seeing opportunities to capture more businesses as most of its facilities, which are based in Southeast Asia, stand to benefit from businesses looking to diversify their supply chain network.

It is also receiving more orders from customers whose suppliers are disrupted by the COVID-19 outbreak.

Maintain BUY and higher target price of S$19.80.

Source: UOBKH

https://research.uobkayhian.com/content ... e4bc0b9eb5

[behappyalways]

Venture Corp maintains full-year dividend of 70 cents even as 4Q earnings dip 10% to $96.3 mil
https://www.theedgesingapore.com/capita ... 10-963-mil

[winston]

not vested

Venture Corp: Looking forward to a better 2H20

Venture Corporation Ltd’s (Venture) 4Q19 results were in-line with expectations.

Full-year core PATMI came in at S$356.4m, or 100.5% of our full-year forecast.

FY19 net profit margin came in at ~10%, at the high end of its usual 6-10% target.

Management has declared a final DPS of 50 S cents, bringing total DPS for the year to 70 S cents.

While it is to be expected that 1Q20 should see some backlog, Venture expects to be able to fulfil most, if not all of its customers’ orders.

Management has also noted that they expect a stronger 2H20, with traction from both new and existing partners.

In our view, Venture could also potentially benefit from customers seeking alternative manufacturing partners who possess facilities ex-China for supply chain resilience and diversity.

We understand that the majority of Venture’s manufacturing footprint is mostly outside China;

Chinese facilities contribute to less than 10% of total output, with about 75-80% of its Chinese workforce now back at work.

Based on a 13.9x target P/E (5-year mean), we derive a FV of S$18.09. Upgrade from Hold to BUY.

Source: OCBC

[winston]

Venture - Recovery delayed; D/G to HOLD (VMS SP, CP SGD13.96, TP SGD13.90, Technology)

We cut FY20-21E EPS by 13-20% to factor in
i) VMS’ partially shut factories in Malaysia and
ii) increasingly cautious customer and supply chain outlook.

We expect consensus to cut earnings expectations as VMS’ has historically underperformed expectations during times of weakening economic fundamentals.

Our ROE-g/COE-g TP falls to SGD13.90, based on 1.5x FY20E P/B (prev: 2x) as we raise COE assumption to 9% (prev: 8%) to account for the stock’s increased volatility.

D/g to HOLD from BUY.

Source: Maybank

https://www.kelive.com/KimEng/servlet/P ... &rid=51886

[winston]

not vested

Venture Corporation (VMS SP)
Factoring In Supply Disruption From COVID-19

In contrast to one month ago when prospects were improving for Venture, the escalation of the COVID-19 outbreak into a global pandemic has now thrown some uncertainties into the company’s outlook.

Despite its solid positioning, we expect supply disruption to impact Venture’s near-term earnings.

Several customers have started to turn cautious.

We slash our 2020 EPS by 16% as we factor in about two months of supply disruption.

Maintain BUY but cut target price by 22% to S$15.50.

Source: UOBKH

https://research.uobkayhian.com/content ... 5b2a88d10a