Venture Corporation - RHB Invest 2020-10-21: Positive Outlook Ahead; Upgrade To BUY

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

Venture Corporation - Positive Outlook Ahead; Upgrade To BUY

  • Venture Corp should chart a steady recovery in 2H20, on a brighter outlook. The company is now fulfilling its backlog of orders, while its research & development laboratory plans to release some new products for the manufacturing segment in early 2021.
  • On its resilience during this COVID-19 pandemic, we upgrade our call for Venture Corp to BUY and lift our Target Price, which is pegged to 19x FY21F P/E.



Trying hard to maintain margins despite lower revenues.

  • Venture Corp (SGX:V03) continues to work with its customers, implementing further cost controls and improving production efficiency. ASP pressure should align its rates to match end-market demand. Meanwhile, non-essential market segments may see some pressure, given their slower rate of recovery due to COVID-19.


Production unlikely to return to high levels.

  • We do not expect production to rebound to pre-pandemic levels, due to social distancing measures. Venture Corp’s main aim, for now, is to meet customer demand, and balance its orders and deliveries.
  • Venture Corp’s top 10 customers now account for 45-55% of revenue, vs 50-60% previously – due to the growing diversification of customers.


Growth in several segments.

  • Customers that have seen increased orders are largely from the life sciences, medical devices & equipment, networking & communications, and semiconductor-related equipment industries. Venture Corp also gained meaningful traction with new customers (in y-o-y and q-o-q terms) – which also include an existing semiconductor partner.

Improving outlook.






Jarick Seet RHB Securities Research | https://www.rhbinvest.com.sg/ 2020-10-21
SGX Stock Analyst Report BUY UPGRADE NEUTRAL 22.60 UP 20.200



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