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Hot stock: Venture slips 10% after posting 72% jump in Q1 earnings
SHARES of Venture Corporation fell 10.2 per cent to S$20.27 on Thursday, following the release of its first quarter results.
The technology products and solutions provider on Wednesday posted a 72.2 per cent growth in net profit for the three months ended March 31 to S$83.7 million, compared to a year ago. Earnings per share stood at 29.2 Singapore cents, up from 17.4 Singapore cents the year before.
Revenue was S$856 million, up 1.5 per cent. In US dollar terms, revenue for the first quarter would have grown by 9.1 per cent, the company said.
On Thursday, CGS-CIMB cut its target price for Venture from S$30.81 to S$25.64 with an "add" call.
OCBC has followed suit by reducing the target price from S$34 to S$30 with a 'buy' call, based on "adjust assumptions with the backdrop of weaker USD against SGD and higher interest rate environment ahead".
An equity sales representative told The Business Times on Thursday: "I think the market is divided on their views on Venture. Some think that Venture earnings may have peaked and analysts are cutting on their forecasted earnings and growth rate and optimism on the stock, while others are holding their ground and their views and forecast."
"The fact that many tech stocks have soared to lofty price levels make them potential candidates for profit taking. The market may take several days to stabilise and find the correct price levels," he added.
Recently, it was uncovered that one million Venture shares worth S$26.9 million were sold short.
On Monday, an online report from anonymous group, Valiant Varriors, claimed that the firm makes 30 per cent of its revenue from producing a cigarette substitute that has plateaued in sales.
Venture's chairman and chief executive Wong Ngit Liong dismissed these as "rumours" at a results conference on Wednesday and avoided discussion on specific customers.