Venture Corporation - RHB Invest 2023-08-08: Poor Near-Term Visibility; Downgrade To NEUTRAL

Venture Corporation - Poor Near-Term Visibility; Downgrade To NEUTRAL

Venture Corp (SGX:V03) | SGinvestors.ioVenture Corp (SGX:V03)
  • Downgrade Venture Corp to NEUTRAL from Buy, with new S$14.40 target price from S$18.26, 4% upside from the current Venture Corp's share price.
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  • Although Venture Corp's valuation is compelling, at -1 standard deviation of its historical mean, visibility of customer demand and earnings outlook remain weak. Given the soft outlook, we now peg our target price to 14x blended FY23-24F from 16x.

Venture Corp's 1H23 earnings below expectations.

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  • While gross margin held stable at 25%, operating margin of 10.1% missed our 10.7% expectations due to higher energy costs and staff costs as a percentage of sales. Earnings as a result met 43% of our full year forecasts.
  • Venture Corp's net cash however, grew from S$2.78 to S$3.08 per share. An interim dividend of S$0.25 amounting to a payout ratio of 52% was declared, in line with expectations. See Venture Corp's dividend date.

Anticipate soft near term outlook.

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Alfie Yeo RHB Securities Research | 2023-08-08

Previous report by RHB:
2023-07-20 Venture Corporation - 2Q Likely Weak, But Outlook Is Positive; Keep BUY.

Price targets by 5 other brokers at Venture Corp Target Prices.

Listing of research reports at Venture Corp Analyst Reports.

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


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