Brokers' take: Analysts positive on Venture Corp's growth outlook for FY2022

ANALYSTS are positive on the growth outlook for mainboard-listed Venture Corporation V03 , amid strong demand across most of its segments and easing supply shortages.

In a report on Sunday (Feb 27), Maybank upgraded its call on the counter to "buy" from "hold", and raised its target price to S$21 from S$19.18, noting that the company had guided for a strong demand outlook for FY2022.

Analyst Lai Gene Lih also raised estimates for Venture's Patmi (profits after tax and minority interests) by 10 per cent for FY2022 and FY2023, as supply-side bottlenecks are easing faster than he expected.

Meanwhile, RHB raised its target price on the stock to S$22.80 from S$20.90, while maintaining its "buy" call, on robust demand and easing component shortages.

In a report on Monday, analyst Jarick Seet raised his Patmi estimates for Venture by 10 per cent in FY2022, and noted that the counter remains one of the brokerage's top picks for the sector.

Shares of Venture, which provides electronics manufacturing services, were trading at S$17.55 as at 1.08 pm on Monday, down S$0.13 or 0.7 per cent.

Maybank's Lai said the stock has likely bottomed and its risk-reward profile has likely turned positive. He noted that the counter's price has fallen around 4 per cent year-to-date, which outperforms some other tech stocks that have fallen 15 to 20 per cent amid the global tech sell-off.

Furthermore, the company's chairman had also raised his stakes in Venture in November, which Lai said is a "signal of confidence" in the company's prospects.

As for RHB's Seet, he noted a backlog of orders from the fourth quarter of FY2021 that would have to be completed in FY2022, which should help drive performance for the year.

Noting that Venture was still able to deliver a strong set of results in Q4 FY2021 despite component shortages, Seet said he is confident that Venture will see a strong rebound as shortages ease.

Both analysts warned, however, that key component shortages will remain an impediment in FY2022, and may limit Venture's growth.

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