Venture Corporation - Maybank Research 2022-11-05: Shining Like A Star

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VENTURE CORPORATION LIMITED (SGX:V03)

Venture Corporation - Shining Like A Star

• Venture Corp reported a solid 3Q22, with revenue up 32.8% y-o-y to S$1.022bn and NPAT rising 26.4% y-o-y to S$97.4m, handily beating our respective forecasts of S$890m and S$89m.
• We remain positive on Venture Corp’s robust order book which is well-diversified in terms of both customers and industries. As a result, we lift our FY22/23E earnings by 3% resulting in a 3% higher target price for Venture Corp at S$20.20, pegged to 16x FY22E P/E.
• Venture Corp remains our top pick in the Singapore Tech sector.

Growth across all domains ( >100 customers)

• Venture Corp (SGX:V03) reported growth across all domains, resulting in quarterly revenue once again exceeding S$1bn with backlog orders still to clear. Even in the semi-conductor segment where a slowdown is expected, management remains confident that its differentiation in capabilities, design and products should see continued strong demand from the specific value-chain where it operates.

Downside risk protected by attractive yield of 4.7%

• Venture Corp declared an interim dividend of S$0.25 per share this year and we expect the final dividend to be at S$0.50 per share. This would represent an attractive 4.7% yield for FY22E.
• Venture Corp will also conduct a corporate share buyback to utilise its S$700.7m net cash position more efficiently.

Venture remains our Top Pick in Singapore tech sector

• Majority of Venture Corp’s revenues are in US$ while a large part of its cost structure is in MYR followed by RMB and US$. As a result, the strengthening of the US$ is beneficial for Venture.
• See
  • Venture Corp's Share Price,
  • Venture Corp's Target Price,
  • Venture Corp's Analyst Reports,
  • Venture Corp's Dividend History,
  • Venture Corp's Announcements,
  • Venture Corp's Latest News.
• While management remains cautious that its business may continue to see volatility if geopolitical tensions, COVID-19 lockdowns and other headwinds remain unabated, we believe that management will likely navigate these issues seamlessly. It will also be shifting towards higher-margin products and solutions.
• Venture Corp remains our top pick in the Singapore tech sector.

Jarick Seet Maybank Research | https://www.maybank-ke.com.sg/ 2022-11-05

SGX Stock Analyst Report BUY MAINTAIN BUY 20.20 UP 19.550