MAYBANK Securities downgraded its call on Venture Corporation : V03 0% to “hold” from “buy” and slashed its target price to S$17.32 from S$20.20, as the research house expects a decline in the electronics manufacturing services provider’s earnings amid macro headwinds.

The revised target price reflected a 10.3 per cent lower net profit after tax (NPAT) forecast for FY2023, and a 10.2 per cent cut for FY2024.

It is based on a 15 times FY2023 price-to-earnings ratio estimate, down from 16 times.

Maybank’s downgrade came as it expects global demand to further weaken, said analyst Jarick Seet on Tuesday (Apr 25).

The analyst lowered his revenue and NPAT forecasts based on the company’s expectations that FY2023 will be a “challenging” year due to macro headwinds, which have intensified over the past two months.

Ahead of the release of Venture’s Q1 FY2023 financials on May 5, Seet said he is expecting results that “will likely be muted”.

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For the first quarter of the fiscal year, he projects Venture’s top line to fall 5.1 per cent to S$843.9 million, resulting in a bottom-line decline of 6.5 per cent to S$78.5 million.

“We expect weaker demand for networking and communications, computer peripherals, data storage, retail store solutions and industrial products, as well as its printing and imaging segments,” he noted.

Despite the lower earnings projections for Venture, Seet expects the company’s dividends to be maintained at an estimated FY2023 yield of 4.3 per cent.

Venture has “always emphasised sustainable dividends in both good and bad times”, according to Seet. He added that the company bought back shares to better utilise its S$813 million of net cash, and that it has no bank borrowings.

Within the technology sector, the analyst prefers mainboard-listed Aztech Global : 8AZ 0% due to strong orders from its key customer. The brokerage has a “buy” call on the stock with a S$1.02 target price.

Shares of mainboard-listed Venture were trading down 0.7 per cent or S$0.12 to S$17.25 as at 10.53 am on Wednesday.