improved  FY13  outlook  with  many  new  projects  to  be  launched  across  different business  segments.  Most  importantly,  we  are  confident  that  the  group  can maintain  dividends  payout  of  55  S''/share,  translating  to  an  attractive  yield  of 7.1%.  Maintain  BUY  with  a  higher  TP  of  S$8.99,  based  on  14.8x  blended FY12/13 earnings (5-yr historical average forward P/E).

Strong  growth  in  segments  with  lower  margins.  Venture's  3Q  top  line performance  has  been  relatively  strong  in  view  of  the  deteriorating macroeconomic  conditions.  Notably,  the  Printing  &  Imaging  and  Computer Peripherals & Data Storage segments increased substantially YoY by  16.6% and 11.2% respectively, thanks to the newly launch projects of mobile printers as well as  Intermec's  rugged  handheld  computer.  Nonetheless,  as  these  segments generate  much  lower  gross margins  as  compare  to that  of  Test  &  Measurement and Networking  & Communications (about 15% vs. 35%), bottom line  eventually weakened.

Expecting  improved  FY13  outlook.  We  are  now  expecting  even  more  new projects  to  be  launched  in  FY13  with  managements  remain  positive  about  the outlook citing that they have expanded market share with existing key customers and acquired a number of new customers in various segments.

Hefty  55  S''/share  dividends  to  be  maintained.  Despite we expect Venture  to only generate S$145.2m profits this year, we are confident that it can maintain the hefty  dividends  payout  worth  of  S$150.9m  (55  S''/share)  in  view  of  the  strong estimated FY12 net operating cash flow of S$169.4m.

Figure 1: Historical quarterly results

Figure 2: Profit and loss

Source: OSK