Grand Venture Technology - CGS-CIMB Research 2022-05-24: Growth Is Still The Objective

Grand Venture Technology - Growth Is Still The Objective

  • We hosted Grand Venture Technolgoy (SGX:JLB) for a post business update call on Tuesday, 24 May 2022. Management explained that the deterioration in profit margin was due to the expanded capacity (both organically and from M&A) that was not covered by higher revenue as well as higher material and energy cost. Grand Venture Technolgoy has started to price in such higher costs in new orders from customers. In our view, managing cost pressure is likely to be the game changer for FY22F as we note management’s comments that the demand outlook remains strong and customer engagement is making good progress.
  • There are no changes to our FY22-24F revenue expectations for Grand Venture Technolgoy as 1Q22 revenue was in line with our expectations. However, we reflect the cost pressures by adjusting our gross profit margins by 1.47-5.63% points in FY22-24F. This results in a 6.39-23.92% drop in our FY22-24F EPS forecasts assuming no further unforeseen cost escalations.
  • We continue to like Grand Venture Technolgoy for its growth orientation. We reiterate our ADD call on Grand Venture Technolgoy with a lowered S$1.29 target price due to lower target P/E multiple and FY23F EPS cut.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

William TNG CFA CGS-CIMB Research | 2022-05-24
SGX Stock Analyst Report ADD MAINTAIN ADD 1.600 SAME 1.600

Previous report by CGS-CIMB:
2022-02-16 Grand Venture Technology - A New Chapter Begins

Check out the most recent target prices at Grand Venture Target Prices. Listing of analyst research reports at Grand Venture Analyst Report.

Relevant links:
Grand Venture Share Price History,
Grand Venture Announcements,
Grand Venture Dividends & Corp Actions,
Grand Venture News Articles


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