Venture Corporation

UOBKayhian on 30 Jan 2015

FY14F PE (x): 16.3
FY15F PE (x): 13.9

Growing and differentiating. Venture targets to achieve mid- to high-single-digit growth in top-line and bottom line for 2015. The operating environment for Venture remains tough with corporations continuing staying lean on capital and IT expenditure. However, Venture is able to cope with the adversity by differentiating itself through a highly diversified product portfolio and customer base while expanding its engineering and R&D capabilities. Growing and differentiating. Venture is aiming for mid- to high-single-digit growth in topline and bottom line for 2015. Disruptions from M&As involving its customers have abated. The depreciation of the Malaysian ringgit and Singapore dollar will help Venture maintain net margin within the targeted 6-8%. Over the longer term, Venture can count on the Life Science segment for growth. Maintain BUY. Rolling forward valuation to 2015, our target price is S$8.75, based on 15x 2015F PE (Benchmark Electronics: 14.7x, Plexus Corporation: 12.8x), justified by its average forward PE of 16.4x over the past 10 years.