Venture Corporation - RHB Invest 2020-11-09: Steady 3Q20 With a Better Outlook; Stay BUY

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

Venture Corporation - Steady 3Q20 With a Better Outlook; Stay BUY

  • Venture Corp has continued its trajectory of recovery with 3Q20 NPAT up 14.2% y-o-y, in line with our estimate. Management expects to deliver a stronger 2H20 (vs 1H20), if COVID-19-related lockdowns and disruptions do not deteriorate further.
  • Venture Corp is fulfilling its order backlog at present, while its research and development (R&D) laboratories aim to release a number of new products for the manufacturing segment from early 2021 onwards.
  • Stay BUY, S$22.60 target price, 14% upside with c.4% FY21F yield.



Trying hard to maintain margins despite lower revenue.

  • Venture Corp (SGX:V03) continues to work with customers, implementing further cost controls and improving production efficiency. ASP pressure is likely to be aligned with end-market demand, looking forward.
  • Meanwhile, non-essential segments may see some pressure as well, given the slower rate of recovery


Production unlikely to return to high levels.

  • Venture Corp's production is not able to rebound to pre-COVID-10 levels due to social distancing measures. As such, Venture Corp’s aim now is to meet demand, and balance this with order delivery. Its top 10 customers now account for 45-55% of revenue (vs 50- 60% prior to the pandemic), although the company is increasingly diversifying its clientele.


Growth in several segments.

  • Over 2021, new products/solutions engineered and developed in Venture Corp’s R&D labs are scheduled for release into the end-markets by its partners and customers in several technology domains. These include fast-growing domains and ecosystems such as life sciences & genomics, healthcare & wellness, as well as COVID-19-related detection, testing, diagnostic products and solutions.
  • Demand for medical devices & equipment, networking & communications, and semiconductor-correlated modules and equipment appears unabated, as well.

Better quarters ahead.






Jarick Seet RHB Securities Research | https://www.rhbinvest.com.sg/ 2020-11-09
SGX Stock Analyst Report BUY MAINTAIN BUY 22.600 SAME 22.600



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......