• Maintain BUY, new SGD14.70 TP from SGD15.40, 14% upside, 6% yield. We stay positive on Venture Corp on its recovery into FY25 as FY24 net profit was within our estimates. FY24 saw sequential 2H24 improvement over 1H24 in revenue with pick-up in Networking & Communications and Advanced Industrial Technology domains. We trim earnings and TP on short-term global trade uncertainties, but maintain our call in anticipation of a FY25F earnings recovery. Our TP is based on 16x FY25F earnings.
• FY24 earnings in line. FY24's revenue was SGD2,736m (-9.6% YoY) while net profit came in at SGD245m (-9.3% YoY) - within our expectations. Revenue was dragged by soft demand, particularly from the Lifestyle Consumer domain. However, the majority of IT domains, particularly Networking & Communications and Advanced Industrial Technology saw sequential improvement in 2H24 vs 1H24, driven by: i) Upgrading of building and security systems and technology purchases as the US corporate workforce returned to offices; and ii) new product wins from customers who moved production from Canada and Mexico to VMS' Asia plants. The decline in Consumer Lifestyle domain saw products with longer battery life and better design reduced volume production for replacement sets that led to slower sales. Net margin was largely in line at 9%. An unchanged final dividend of 50 SG cents per share was declared, bringing full-year dividends to 75 SG cents per share, representing an 89% payout ratio. Net cash increased to SGD1.3bn from SGD1.1bn in FY23.
• Lower FY25F-26F earnings by 5%. Although FY24's revenue and net profit were in line, we lower our FY25F-26F earnings by 5% each year, to reflect caution on some customers as they await more clarity from US president Donald Trump's trade policies. Nonetheless, we expect growth to be driven by new business wins across its various domains.
• BUY on positive outlook, compelling valuations. We continue to like VMS for its strong net cash balance sheet, positioning for a FY25F earnings growth, consistent DPS payout, attractive dividend yield, share buyback initiative, and valuation below historical mean. Growth is driven by new customers, new product introductions (NPIs) for domains such as life science and artificial intelligence (AI) data centre-related segments, leveraging on design capability, strong supply chain, and focus on high-value solutions.
• Downside risks to our forecasts include earnings downside on a weaker-or later-than expected recovery in customer orders and demand.
• ESG. As VMS's ESG score is 3.0 out of 4 - below our 3.1 country median - we apply a 2% discount to our intrinsic value.

Source: RHB Research - 25 Feb 2025