-->

Venture Corp - RHB Invest 2016-02-29: Slow Start To 1H16

Venture Corp - RHB Invest 2016-02-29: Slow Start To 1H16  VENTURE CORPORATION LIMITED V03.SI 

Venture Corp - Slow Start To 1H16 

  • Venture’s recipe for success would still be in creating value for customers, as it continues to focus on developing products in key areas like life sciences/medical, high-end instrumentation and 3D printing. 
  • However, management highlighted that customers have toned down their forecasts due to an uncertain outlook and expects a slower 1H16, before business picks up in the second half of the year. 
  • Thus, we trim our earnings estimate for this year by 6%, which results in a lower TP of SGD9.10 (from SGD9.20, 13% upside)
  • Maintain BUY. 


Aims to create more value per dollar of revenue. 

  • Venture’s strategy, going forward, is to aim for value creation, ie increase its value per dollar of revenue. 
  • It would also continue to grow its market share among existing customers by being involved with more products and projects. 

Strong growth in two divisions. 

  • Revenues from its networking and communications unit as well as that of its test and measurement segment grew 16.3% and 10% YoY respectively. 
  • Going forward, we continue to expect growth to likely come from these segments, especially for products related to the scientific/medical space. 

A better 2H16 than 1H16. 

  • With an uncertain outlook and weakening economic conditions, customers have toned down their forecasts – especially for 1H16. As a result, management expects a slower 1H16, before orders pick up in 2H16. 
  • Key risks include an economic downturn and a weakening of the USD. 

Maintain BUY. 

  • With an uncertain outlook and weakening economic conditions, we trim our earnings estimates for this year by 6%, resulting in a slightly lower TP of SGD9.10, based on a 15.5x FY16F P/E and backed by a 6.2% dividend yield. 
  • Maintain BUY.





Jarick Seet RHB Invest | http://www.rhbinvest.com/ 2016-02-29
RHB Invest SGX Stock Analyst Report BUY Maintain BUY 9.10 Down 9.20


Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......