Grand Venture Technology - CGS-CIMB Research 2022-08-11: Onboarding New Customers Key To Re-Rating

Grand Venture Technology - Onboarding New Customers Key To Re-Rating

  • Grand Venture Technology (SGX:JLB)'s 1H22 revenue rose 25.3% y-o-y to S$67.1m with all business segments registering y-o-y growth. 1H22 revenue was in line with our expectation. 1H22 core net profit of S$7.1m was 21% below our S$9.0m expectation, forming 32% of our full-year forecast. 1H22 gross profit margin (GPM) was 26.9% vs 33.1% in 1H21.
  • Grand Venture Technology's 1H22 interim dividend was cut to S$0.003 from S$0.005 in 1H21.
  • Although Grand Venture Technology's management sees robust demand across all its business segments in 2H22F, it is mindful that the headwinds faced by some of its back-end semiconductor customers may cap the group’s growth in the near term. Hence, Grand Venture Technology seeks to mitigate this with its expansion into the front-end semiconductor business.
  • Grand Venture Technology updated that engagement with prospective customers is progressing well and guided that the onboarding of these new customers is expected to mitigate the softening demand situation from back-end semiconductor customers.
  • In the Life Sciences segment, Grand Venture Technology expects demand to remain resilient given the typically long lifecycles of the customers’ products. Grand Venture Technology is also addressing the rising cost environment via further automation and passing on some of the cost increases to customers.
  • We cut our FY22-24F earnings per share (EPS) forecast by 31.4-34.7% as Grand Venture Technology navigates the difficult operating environment. This leads to a lower target price of S$0.85 for Grand Venture Technology based on 13.0x (+0.5 standard deviation above the average forward P/E multiple for Dec 19 to Aug 22; previously we used a 13.1x P/E multiple) on our FY23F EPS forecast.

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 | 2022-08-11
SGX Stock Analyst Report ADD MAINTAIN ADD 0.85 DOWN 1.290

Previous report by CGS-CIMB:
2022-05-24 Grand Venture Technology - Growth Is Still The Objective

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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