- Grand Venture reported a 44.8% y-o-y jump in revenue to S$44.6mil, in line with 1H25 revenue guidance of S$90-96mil (+32-41% y-o-y). 1Q25 sales accounted for 48% of the midpoint of 1H25 guidance and ~23% of our FY25 revenue forecast.
1Q25 semiconductor revenue rose on strong HBM tester demand and front-end contributions.
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- Life sciences and electronics, aerospace, medical, and others (EAMO) segments also delivered respectable growth of 28.0% and 25.8% y-o-y, respectively.
- Life sciences benefitted from continued wallet share growth with existing customers due to a manufacturing shift to Asia.
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- EAMO was aided by S$3.1mil in contributions from newly onboarded ACP, offset by lacklustre electronics demand.
Gross margin lower than expected due to sales mix.
- Gross margin fell by 0.8ppt to 25.0%, which we believe reflects lower margin contributions from ACP, a less favourable sales mix of test head manipulators within the semiconductor segment, and ongoing absorption of expanded capacity and capabilities, which we believe will yield greater operating leverage as volumes scale further in FY25.
- Grand Venture is currently negotiating with suppliers in the semiconductor space, and we can expect an improvement in margins from 2H25, with a longer gross margin target of 30% in 2026/2027.
Earnings came in below expectations due to forex headwinds.
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