Venture    Last:15.35    -0.18

Hold or Sell?

Despite results missing expacations, investors could have taken comfort that the qtr was an improvement versus its disatrous 1Q13 performance, while gross margins also improved slightly. At current price, the counter has a div yield of ~7% which is rather attractive.

 

Results were below consensus, although the grp saw an improvement from its last qtr performance, with net profit at $30m (-11% y/y, +7% q/q), partially dragged by a higher-than-expected tax expense. The better q/q comparison was driven by higher revenue in particular from Test & Measurement where Venture enjoyed market share gains from existing customers, and Printing & Imaging which stabilised after a horrendous 1Q.

Retail Store Solutions was decently stable given that 2012 was a very high base. Disappointingly however, Networking & Communication continued to be dragged down by a slow M& A-related transition at major customer Hypercom, which was acquired by Verifone Going forward, management believes that the operating environment looks to have improved with most existing customers showing signs of recovery and sees sales momentum across its major sectors, while new customers including Oclaro could possibly have a higher contribution in 2H13. The company also said that it will invest in engineering and marketing capabilities to deliver innovative products and solutions.

Maybank-KE note that Free cashflow for the grp has improved from just $6m in 1Q13 to $40.7m in 2Q13, which is inline with last year?s trend and does not take yet into account expectations for a significant jump in capex in 2H13 given that Venture still has to pay for the bulk of its $38m purchase of a Singapore factory. YTD capex is only about $16m but expect at least $40m in 2H13. Nevertheless, given the tight way Venture runs its balance sheet, house expect dividends to remain safe at least for FY13.

Latest brokers ratings as follows: Maybank-KE upgrades to Hold with $7.63 TP Nomura maintains Buy with $9.20 TP UOB Kay Hian maintains Buy with $8.05 TP

 

Every Quarter, profit gets lower & lower.

Sooner or later, it will not be able to support the current dividend rate %

Think hard...

 

PUBLISHED AUGUST 13, 2013
Venture sees 10 per cent drop in profit
BY AMIT ROY CHOUDHURY


GLOBAL technology company Venture Corporation reported a 10.3 per cent drop in net profit to $30.1 million for the second quarter ended on June 30. Revenue dropped 3.9 per cent to $587.7 million during the quarter.
According to the company, the decline in net profit is primarily due to higher income tax provision for the quarter. Diluted Earnings Per Share (EPS) was 10.9 cents for the quarter compared to 12.2 cents for the same period last year.
The group generated cash from operations of $59.1 million and the working capital stood at $648.8 million as at June 30.
Inventories stood at $540.3 million for the quarter with trade receivables of $425.1 million and Trade Payables of $316.6 million. Working capital was slightly lower compared to the prior quarter mainly due to an increase in Trade Payables.

http://infopub.sgx.com/FileOpen/2Q2013PressRelease.ashx?App=Announcement& FileID=251969

 

Window dressing most likely .. Nothing to shout about

 

Aberdeen Asset Management Asia Limited bought 42K of Venture share from the market.

 

Counter is down 0.14% today, hardly a surprise, with the counter having been range bound after it reported a dismal set of results in May, which saw weak financial performance across most segments, exacerbated by higher income tax expense and lower contributions from associates. Going forward, management notes that the operating environment for the global electronics industry remains challenging with no clear signs of recovery in the near term. The group aims to sharpen its focus on increasing market share and win new programs and customers, while considering strategic investments to meet longer-term goals. Nevertheless, with a net cash position of $294.1m ($1.07 cash / share), Venture’s balance sheet remains sturdy, which should enable the group to ride out the current storm. However, with a dividend payout at almost 100% and capex doubling to at least $68m in FY13, it may be difficult for Venture to sustain its DPS of 50¢, hence putting its attractive 6.5% yield under pressure.

 

OCBC maintains Hold with $7.37 TP. House note that conversation with Venture highlighted that sentiment among its customers has largely remained cautious given the still uncertain macroeconomic conditions. This is in line with tepid macro data points which were released recently. House now expect grp’s 2H13 recovery strength to be weaker than its previous expectations. Hence, pare FY13/14F revenue forecasts by 5.4/1.6%, even as house take into account the recent appreciation of the USD vis-à-vis the SGD. FY13/14F net profit estimates are lowered by 7.8/6.6%, respectively. While house like Venture’s strategy of continuing its acquisition drive for new customers and growing its market share with existing customers by leveraging on its strong design and engineering capabilities, prefer to wait for clearer signs of a rebound in the global economic conditions before turning more positive on the stock.

 

...Married Deal:  Vol: 182  Value: $1,336,426  ie $7.343/share  Prev Close: $7.350...

    ...seems to picking up after the recent low @ $7.06...

 

The amt of Dividend is too little compare to capital appreciation and from a FA point of view

 

Today the company bought back 69,000 shares at avg px of $7.3858

 

Frankly speaking I thought of picking up at my set price which is 7 after its ex-DVD dip. But it hit at 7.06. You got since 2009, think by now you have collected total of $3150 dvd if you vested 1 lot.

 

Have been holding this since 9.68 in 2009 and was stuck.. Didn't average down when the subsequent crisis comes in.. But my advice for those who is interested in investing in this counter is .... Don't tied yr cash in this just because of the dividend... If everyone know the company well enough... Which I do since my company is selling component to them... It's not all that rosy... And even with the hypercom business coming in.. It's still not good enough... Manufacturing in Singapore is in sunset territory.,. It's not as if they are paying bi annual dividend of 50cents each time.. For those who want to invest,. You could but there are some much more you can do with this huge sum of money in other counters... For sale of Dividend... Forget it...

 

Think I got no chance to pick at 7 if it keeps going. Maybe got to adjust my target price Liao.

 

Venture started to buy back own share.Today the company bought just 1 lot only.

So far this counter have moved up a little despite the market sell down.

 

Tis is good company don't worry

 

 

Lim & Tan Sec. is upgrading their  recommendation on Venture to BUY as

 we believe that the company can sustain a 50 cents dividend payout this year, translating to an attractive yield of 6.9%



 the restructuring of Hypercom will likely be completed by mid-2013 and we expect incremental contributions to Venture in 2H2013

 since the company’s listing 20 years ago, the company had not bought back any shares until late last year when it bought back 100,000 shares between the $7.70-8 level and given its consistently strong free cash flows and net cash position of $294mln as at 1Q ‘13, representing 15% of its market cap, we believe further share buy backs could support the stock

 its 13x PE and 6.9% yield is uindemanding relative to its historical average of 15x and 5-6%.1Q ’13 will likely be the trough in terms of business performance as new customers and products start to contribute in 2Q ’13 and pick up steam in 2H 2013 as the seasonally stronger period kicks in

 

Manufacturing sector is in downspin

 

Waiting for them to sell more. See whether got chance to pick below 7.:)

 

If Aberdeen is selling, n judging by the daily vol i dont think there are any big players accumulating Vent Shares.