Simons Trading Research

Author: simonsg   |   Latest post: Tue, 13 Dec 2022, 10:52 AM


Venture Corp - a Beacon of Light; One of the Last Bastions

Author:   |    Publish date:

  • Venture Corp (SGX:V03) remains one of the bright spots among Singapore tech stocks amid a challenging environment. Management anticipates demand to remain unabated in 2H22.
  • However, we conservatively expect margins to come under pressure when new orders are negotiated. As a result, we revise down our FY22 & 23E earnings forecast for Venture Corp by 3% each and reduce our target price for Venture Corp to S$19.55 from S$22.90, based on a lower 16x (from 19x) FY22E P/E, as tech stocks around the world have been de-rated in recent few months and valuations have come off sharply.

Demand Still Robust, But Margins Might be Reduced

  • With the economic environment becoming more challenging week by week, we expect Venture Corp's margins to come slightly under pressure as new orders are being negotiated, especially if a recession hits.
  • Venture Corp still sees strong demand for the rest of 2022 across its customer base, especially in the life science & genomics, healthcare & wellness, networking & communications and process & test equipment in the semiconductor space.

Attractive Yield of 4.4%

  • Refer to Venture Corp's Dividend History. Venture Corp's management declared a 1H22 dividend of S$0.25 per share. We expect the final dividend to be S$0.50 per share, same as previous years, representing an attractive yield of 4.4% for FY22E.

Moving Into Higher-margin Products

  • Venture Corp will be aiming to move towards higher-margin products, focusing on several technology domains of the future that would yield higher margins than its existing products. It also aims to ramp up business in these areas over the next 5-10 years.
  • Despite expecting margins to be under pressure amid rising costs, Venture Corp has shown it has ridden these challenges well, which also highlights its strong customer ties as it can pass on higher costs to clients and remain one of our top picks in the Singapore Tech space.

Source: Maybank Research - 7 Oct 2022

Share this
Labels: Venture

Related Stocks

Chart Stock Name Last Change Volume 
Venture 18.48 +0.02 (0.11%) 462,600 

  Be the first to like this.

I3 Messenger
Individual or Group chat with anyone on I3investor

235  166  241  706 

Top 10 Active Counters
 HSI 23000MBeC.. 0.059+0.005 
 HSI 20800MBeP.. 0.038-0.007 
 YZJ Shipbldg SGD 1.30+0.01 
 Sembcorp Marine 0.141-0.001 
 Tencent 5xLon.. 0.196+0.009 
 CapLand IntCom T 2.11-0.03 
 HSI 20200MBeP.. 0.027-0.006 
 The Place Hldg 0.0150.00 
 HSI 19000MBeP.. 0.037-0.006 
 HSI 23800MBeC.. 0.03+0.003