- Our 3Q23 net profit estimate (S$64.0m) for Venture Corp (SGX:V03) was spot on. Venture Corp reported 3Q23 net profit of S$63.3m (-35.0% y-o-y; -4.7% q-o-q).
3Q23 net profit in line; likely the trough
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- 9M23 net profit formed 75.3% of our FY23F forecast but was below consensus’ FY23F expectation (at 69.2% of consensus FY23F net profit).
- Net profit margin fell 0.7% point y-o-y to 8.9% in 9M23. Given the 18.8% y-o-y revenue decline in 9M23, the slight 0.7% point decline in net profit margin suggests that Venture Corp likely reduced its operating expense run-rate for 9M23.
We see net profit recovering 5.4% q-o-q in 4Q23F
- - Read this at SGinvestors.io -
- Given the higher 4Q22 base, we think net profit could still decline 31.9% y-o-y. Venture Corp's net profit growth could resume in FY24F, in our view, given the benefit of a lower base comparison in FY23F.
- Venture Corp guided that new product introductions (NPIs) with existing and new customers are on track to be rolled out in FY24F. It is also seeing a pick-up in demand from its life science and industrial customers for its module solutions.
Reiterate ADD
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