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Hot stock: Venture Corp up almost 14% after Q3 results leave analysts in the dust

SHARES of Venture Corp surged almost 14 per cent on Monday, as a stellar set of third-quarter results out last Friday left market forecasts in the dust.

The counter surged S$2.67 or 13.83 per cent to S$21.97 as at 3.55pm, making it the top gainer on Monday.

The electronics services provider last Friday revealed a set of third-quarter results that blew past consensus forecasts, forcing analysts to bump up their target prices on Monday.

Venture's net profit rocketed 135 per cent from a year earlier to S$111.4 million for the third quarter, on a 50.5 per cent jump in revenue to S$1.06 billion.

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Analysts expect 2017 to be a record year for Venture.

On Monday, DBS analyst Carmen Tay raised her 12-month target price to S$26 - the highest on the street.

She wrote: "Venture's share price has gained over 95 per cent in the year to date, but we believe there is still room to run as it continues to deliver superior earnings performance.

"With Venture set for a record 2017, and further gains of S$12.7 million to be recognised in the upcoming quarter following the disposal of its stake in Fischer Tech, we see potential for a higher dividend payout.

"Venture typically pays a fixed 50 Singapore cent dividend per annum, but history shows that it did reward shareholders with a higher dividend of 58 Singapore cents back in 2007 when earnings performance had peaked. We are optimistic of a higher payout of about 55 Singapore cents."

RHB analyst Jarick Seet also maintained a "buy" call with a S$24.10 target price.

He wrote: "We think that higher dividends of 80 Singapore cents a share, as compared to the usual 50 Singapore cents, are highly possible."

UOBKayHian analyst Nicholas Leow also maintained a "buy" call with a higher target price of S$23.50, based on a 2018 forward price-to-earnings ratio of 18 times.

He wrote: "We raise our net profit estimates for 2017 to 2019 by 22.4 per cent to 41.5 per cent as we have grossly underestimated Venture's growth prospects and revenue momentum."

OCBC analyst Eugene Chua reiterated a "buy" with a target price of S$23.