Venture Corporation - DBS Research 2023-09-11: Look Beyond A Weak 2023; Depressed Valuation Offers Favourable Entry Point

• We upgrade Venture Corp (SGX:V03) to BUY from Hold, premised on:
  • At current FY23F/FY24F P/E of 12.6x/11.2x, Venture Corp's share price is trading at the previous low in March 2020, which was due to the COVID pandemic. We believe the attractive valuation should not be ignored for a company with strong financials, above-peers’ net margins and high net cash as % of market capitalization at 24%.
  • - Read this at SGinvestors.io -
  • Higher dividend on the cards?

Weak demand coupled with MSCI portfolio rebalancing led to a steep decline in Venture Corp's P/E.

• - Read this at SGinvestors.io -
• Venture Corp’s P/E valuation has plummeted to more than 2 standard deviation below its four-year average and is now at the depressed level seen in March 2020 when valuations were hit by the COVID pandemic.
• At the current valuation of ~12x, Venture Corp is now trading on par with its global peers. Compared to Singapore-listed peers, the valuation is still ~10% above its peers, which can be justified by its high net margins of close to 10%, vs low single digits of its peers. Furthermore, Venture Corp is also in a strong net cash position, vs mainly net debt for its global peers.

A value trap or attractive entry level to position for an anticipated recovery in 2024?

• Read more at SGinvestors.io.

Lee Keng LING DBS Group Research | https://www.dbs.com/insightsdirect/ 2023-09-11 SGinvestors.io

---