Venture Corp - Maybank Kim Eng 2021-03-01: Steady Recovery

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

Venture Corp - Steady Recovery


Recovery continues; Maintain BUY

  • Venture Corp (SGX:V03)'s 2H20 PATMI of S$166.8m (-8.1% y-o-y) was in line with our estimate, and met the lower end of street’s.
  • We trim our Venture Corp's FY21-22E earnings per share forecasts by 4-5% to fine-tune margin assumptions, although our revenue numbers are largely unchanged – reflecting our confidence of the ongoing recovery. New products are on track for launch in 2Q21 and into 2H21.
  • Maintain BUY with lower target price of S$22.00 on unchanged 18.5x FY21E P/E (1.5 standard deviation above 4-year mean).



Resilient revenue and margins from diversity

  • Venture Corp's 2H20 revenue fell 8.6% y-o-y to S$1.65b, although this was up 20.6% h-o-h. Several end-markets were affected by COVID-19, particularly those facing retail end-markets (e.g. POS, consumer electronics), but this was offset by resilience in life-science, networking and communication and semicon, which are beneficiaries in the pandemic.
  • As Venture Corp’s value-add is higher in the life-science domain, net margin was flat y-o-y at 10.1% despite lower volumes.


Leveraging R&D to capture opportunities

  • Growth in the life science domain is expected to be driven by genomics-related products and advanced equipment for analysis/ diagnostics in biological systems. COVID-19 also presents opportunities to develop pandemic-related testing and diagnostic products.
  • Venture Corp says it is leveraging its R&D capabilities to develop cutting-edge products in life science, medical devices and lifestyle and wellness consumer products.

Moving into interesting domains






Gene Lih Lai CFA Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-03-01
SGX Stock Analyst Report BUY MAINTAIN BUY 22.00 DOWN 23.270



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