- Venture Corp (SGX:V03)'s 2Q23 profit after tax (PAT) was down 26% y-o-y to S$66.7mil. Results were below expectations. Medical devices demand is down post-pandemic and other electronic products face overstocking. 1H23 revenue and PAT were 44%/45% of our FY23e forecast.
- - Read this at SGinvestors.io -
- We expect the weakness in revenue to persist until year-end. Recovery will come from new products such as EV chargers, semiconductor equipment and data centres.
- We lower our FY23e PATMI forecast for Venture Corp by 5% to S$296mil. Our revenue estimates for Venture Corp are cut by 8% to S$3.3bn.
- - Read this at SGinvestors.io -
The Positive
Stable gross margins and healthy net cash.
- Despite the weaker revenue, gross margins were stable at 25.1%. We believe the weaker ringgit, lower freight cost and reduced labour force were some of the drivers to stable margins.
- Venture Corp's net cash improved by S$191mil y-o-y to S$896mil. The cash hoard has turned interest income into an earnings growth driver. 1H23 interest income jumped 4-fold from S$3.1mil to S$12.5mil.
The Negative
Inventory is still too high.
- Read more at SGinvestors.io.
