Venture

Re: Venture

Postby winston » Thu Mar 01, 2018 12:11 pm

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
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Re: Venture

Postby winston » Thu Mar 01, 2018 12:22 pm

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Venture: 4Q17 net profit surged 165% YoY to S$143mn on higher R&D revenue of S$1.1bn.

This was Venture’s third straight quarter of sales above S$1bn.

For the full-year, earnings doubled YoY to S$373mn, beating consensus estimates by 12%.

Declared a final dividend of 60 SG cents, up 20% from 50 SG cents in the prior year period.

Balance sheet remained strong with net cash of S$752mn at end 2017.

Source: KGI
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Re: Venture

Postby winston » Fri Apr 20, 2018 3:30 pm

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March 13, 2018

A developer of next-generation products

Positive momentum expected to continue in FY18.

According to PMI’s management, IQOS device contributed ~US$160 mn and ~US$900 mn to
PMI’s sales in FY16 and FY17, respectively.

Based on our estimates, ~3 mn and ~11 mn units of the IQOS device were sold in FY16 and
FY17 respectively, and we expect ~20/23/26 mn units of these to be sold in FY18/19/20.

We believe that IQOS contributed ~S$421 mn or 11% of Venture’s overall revenue in FY17. For FY18, we expect it to contribute ~S$626 mn or 14% of revenue, and grow 49% YoY.


Maintain OUTPERFORM. We continue to like Venture as it works on launching more next generation products that will drive growth with better margins.

Also, several of Venture’s notable customers continue to display positive growth momentum.

We maintain our OUTPERFORM rating on the stock.

Net cash position of S$721.6 mn as of 4Q17 represents ~33% of NAV.


Source: CS

https://c4c023a2-a-62cb3a1a-s-sites.goo ... edirects=1
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Re: Venture

Postby winston » Wed Apr 25, 2018 2:30 pm

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Venturing into the smoke

Venture Corporation (V03)

Our rating: Sell

The cause for the optimism among some stock analysts is that the IQOS’ contribution to Venture is not significant. Estimates range from as low as 3 per cent, to as high as 11 per cent. This is backed up by Venture, which said that not one customer makes up more than between 5 per cent and 10 per cent of their total sales.

Based on our extensive research, we believe that IQOS accounts for 30 per cent of Venture’s revenue.


Secondly, we have to ask about the extent of the damage IQOS has done to Venture. According to our sources, Q1 sales orders at Venture have declined by a staggering 50 per cent from initial 2018 forecasts.

This is partly affected by the entry of PMI’s second supplier, Flextronics, which is hungrier and more aggressive than Venture. Flex’s supply price to PMI is 20 per cent lower than Venture, which means they are producing 20 per cent more volumes too.


Venture should not be trading at 16x forward earnings. That is reserved for fast growth companies. Venture is anything but fast growing, and, in fact, quite the opposite after PMI’s fiasco.

We estimate that Venture will miss Q1 earnings by between 6 per cent and 8 per cent.


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Source: Valiant Varriors

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Re: Venture

Postby winston » Wed Apr 25, 2018 3:54 pm

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Slower demand in Japan but Venture expects Europe, South Korea to pick up the slack

By Samantha Chiew

SINGAPORE (Apr 24): UOB Kay Hian is maintaining its “buy” call on Venture Corporation with a lower target price of $30.60.

In a Monday report, analyst Foo Zhi Wei says Venture's share price has largely overreacted to Phillip Morris International’s (PMI) slower 1Q18 growth of I Quit Ordinary Smoking (IQOS) e-cigarette products in its key market of Japan.

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This was attributed to sales reaching an older segment of users in their 50s at a faster-than-expected rate, resulting in a slowdown in growth due to slower adoption.

Nonetheless, PMI’s management reiterated that they remain on track to achieve their year-end target for IQOS.

While growth in Japan had slowed down, PMI’s 1Q18 results showed IQOS’s share of market (SoM) saw a significant pick-up in other markets.

European cities in Slovakia, the Czech Republic and Ukraine showed a near doubling in SoM on a q-o-q basis.

Elsewhere in South Korea, growth momentum for IQOS continued to be strong, reaching a 7.3% SoM, compared to 5.5% in 4Q17.

In addition, while there is no news with regards to US FDA approval, this is still expected to be secured within 2Q18.

Meanwhile, Venture’s supplier for IQOS plastic components, Xiamen Intretech reported that 1Q18 revenue rose 11% y-o-y, but dropped 30% q-o-q due to production orders being seasonally high in 4Q17.

In its management guidance, Xiamen Intretech remarked that 2Q18 orders for IQOS plastic components would be lower, which will result in 1H18 revenue falling by 0-15% y-o-y.

“This translates to 2Q18 revenue coming in 2-32% lower q-o-q, by our estimates,” says Foo.

The analyst notes that although revenue contribution from IQOS may stand out among the Test & Measurement/Medical/Others segments, there are also several other products that have driven the group’s growth in 2017 and expects this to continue into 2018.

As at 2.53pm, shares in Venture Corp are trading $1.74 or 6.8% lower at $23.83 or 15.7 times FY18 pearnings with a dividend yield of 2.4%.

Source: The Edge

https://www.theedgesingapore.com/slower ... a-91832885
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Re: Venture

Postby winston » Thu Apr 26, 2018 9:33 am

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Growth Prospects remain Favourable

We continue to believe that VMS has multifaceted growth drivers and see the recent correction as an even more attractive opportunity to BUY.

VMS delivered very respectable 1Q18 PATMI of SGD83.7m (+72% YoY), but was below our estimate of SGD90m, mainly due to the weaker USD vs the SGD.

Revenue rose 1.5% YoY, but would have been up 9% on a constant currency basis.

We have cut FY18-20E EPS by 7-9% to reflect the results.

Our TP is reduced 8% to SGD28.83, now based on 3.4x P/B from 3.7x previously.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/9 ... a10c48.pdf
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Re: Venture

Postby winston » Thu Apr 26, 2018 9:33 am

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Growth Prospects remain Favourable

We continue to believe that VMS has multifaceted growth drivers and see the recent correction as an even more attractive opportunity to BUY.

VMS delivered very respectable 1Q18 PATMI of SGD83.7m (+72% YoY), but was below our estimate of SGD90m, mainly due to the weaker USD vs the SGD.

Revenue rose 1.5% YoY, but would have been up 9% on a constant currency basis.

We have cut FY18-20E EPS by 7-9% to reflect the results.

Our TP is reduced 8% to SGD28.83, now based on 3.4x P/B from 3.7x previously.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/9 ... a10c48.pdf
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Re: Venture

Postby winston » Thu Apr 26, 2018 9:37 am

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1Q18: Barely Within Expectations; Lack Of Clarity To Fuel Share Price Weakness

Venture reported a 1Q18 net profit of S$83.7m, forming 18/19% of UOBKH/consensus earnings forecasts, barely within expectations despite seasonality.

One positive was the above-average GPM of 16%, though the sharp qoq revenue drop-off suggests a production drop-off.

Management did little to address issues raised in the short sell report, and weakened sentiment has resulted in a multiples de-rating.

Lower 2018-20 earnings forecasts by 3-4%.

Maintain BUY but lower target price to S$25.00 (16.1x 2018F PE).

https://research.uobkayhian.com/content ... dc81b17a91
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Re: Venture

Postby winston » Thu Apr 26, 2018 9:47 am

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Even a good company cannot fight market sentiment

1Q18 revenue grew by 1.5% yoy and formed 18.7% of our full-year forecast, below the 5-year historical average of 22.5%.

1Q18 core net profit at 19.1% of our full-year forecast was in line with the 5-year historical average of 19.3%.

Cash generation continues to be strong. Net cash from operations was S$28.2m in 1Q18 versus negative S$134,000 in 1Q17.

Net profit margin for 1Q18 was 9.8% versus 5.8% in 1Q17 and 13.2% in 4Q17. 1Q18 effective tax rate was lower at 15.1% versus 19.0% in 1Q17.

Target price cut to S$25.64 as we revert to its 11-year average P/E of 15.4x as our valuation basis (previously 17.7x).

Source: CIMB

https://brokingrfs.cimb.com/xn-qmaqnKk7 ... wxaBg2.pdf
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Re: Venture

Postby winston » Thu Apr 26, 2018 9:49 am

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Venture Corp: Don’t fret over a speed bump

Venture Corporation Ltd’s (VMS) 1Q18 revenue grew 1.5% to S$856.0m due to weakened USD. In USD terms, revenue growth would have grown by 9.1% instead.

However, 1Q18 operating expenses declined 3.2% YoY to S$759.5m. As a result, 1Q18 PATMI came in within expectations as it surged 72.2% YoY to S$83.7m, and formed 19% of our FY18 forecast.

Note that first quarter has historically been the weakest quarter since FY13. After Philip Morris International (PMI) announced that its IQOS (smoke-free electric cigarette) devices in Japan recorded slower-than-expected growth in sales, VMS’ share price has since plunged ~22% between 19 Apr 18 and 25 Apr 18.

We estimate PMI contributed ~10% of VMS FY17 revenue, suggesting the plunge in share price more than wiped out this contribution. However, PMI’s management highlighted it is an issue on speed of growth, not decline in sales.

On abovementioned reasons, we pare our FY18F/19F EPS estimates by 6%/6%. Consequently, our FV declines from S$34.00 to S$30.00 as we also adjust assumptions with the backdrop of weaker USD against SGD and higher interest rate environment ahead.

All considered, we remain positive on VMS’ broad-based growth outlook supported by sustainable margins.

Source: OCBC
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