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Broker's take: Maybank Kim Eng raises target price on Venture

ANALYSTS at Maybank Kim Eng have maintained their "buy" call on Venture Corporation but have increased their target price for the electronics services provider's shares by 13 per cent from S$27.50 to S$31.20 following the company's strong earnings for fiscal 2017.

Venture reported on Wednesday that net profit more than doubled in the fourth quarter, surging 164.5 per cent to S$143 million.

Maybank highlighted that with approximately 75 per cent of Venture's revenue accruing from customers with good growth prospects across several technology domains, the company might continue to benefit from broad-based growth, adding that it is "a beneficiary of multifaceted growth drivers that have yet to peak".

In the research note published on Friday, Maybank also said research and development (R&D) investment was a key driver of growth for Venture.

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It added that given that R&D has historically preceded revenue growth by 1.5 to 2 years, the investments that the company has made in the fourth quarter of fiscal 2017 " could bode well for future revenue growth prospects".

Venture shares were trading at S$0.17 or 0.6 per cent lower at S$26.75 as of 2.15pm on Friday.