Venture Corporation - CGS-CIMB Research 2018-11-26: Optimistic On The Long-Term Outlook

VENTURE CORPORATION LIMITED (SGX:V03) | SGinvestors.io VENTURE CORPORATION LIMITED (SGX:V03)

Venture Corporation - Optimistic On The Long-Term Outlook

  • We hosted an NDR for Venture on 23 Nov 2018.
  • The company remains confident on its long-term prospects. Trade tariffs could prove to be positive for Venture.
  • Meanwhile, the company has various experienced professionals to address the succession issue.



NDR

  • We hosted an NDR for Venture on 23 Nov 2018 which was attended by 15 investors.
  • At the NDR, Venture shared its optimism on the long-term outlook and that it maintained its determined focus to remain an outstanding partner to its customers.
  • We maintain our ADD rating with Target Price of S$17.44 based on 12.3x FY20F P/E (0.5 s.d. below the 11-year average of 15.3x).
  • Catalysts include stronger-than-expected customer orders while a key risk is delay in customer orders.


Innovating into the future

  • Chairman and CEO, Mr. NL Wong, shared that he remains optimistic on the long-term growth outlook for the company.
  • Venture will continue to go beyond operational excellence and has allocated resources to identify new business clusters/technology domains where it can add value and justify better margins.


Key takeaways from the NDR

  • Venture thinks it will benefit from the current US-China trade tension but global manufacturing supply chains will take time to change.
  • According to management, Venture generally tries to aim for a 6-10% net profit margin range. This, however, requires the whole corporation to work in tandem, in our view, and Venture would have to continuously add new differentiating capabilities.
  • Venture has more than 50-60 key professionals in the company that are part of the team that is driving future growth for the company.





William TNG CFA CGS-CIMB Research | https://research.itradecimb.com/ 2018-11-26
SGX Stock Analyst Report ADD MAINTAIN ADD 17.440 SAME 17.440



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