Venture Corporation

UOBKayhian on 13 June 2014

FY14F PE (x): 14.4
FY15F PE (x): 12.7
More stability, less volatility. In the past, customers gave overly optimistic forecasts and
cut orders on any minute sign of slowdown. Business sentiment for most customers
has turned positive this year. Demand from customers is “steadier” and execution for
new projects is on track. Most customers are providing a steady flow of orders.
Anticipates sequential lift in 2H14. We are gratified by the improvement in business
sentiment and the sequential growth in 1H14. The strengthening of the US economic
growth augurs well for Venture due to its base of predominantly US-based customers.
The stock continues to provide lucrative dividend yield of 6.6%.
Maintain BUY. Our target price is S$8.68, based on 16.4x 2014F PE (Benchmark
Electronics: 15.7x, Plexus Corporation: 15.6x), justified by its average forward PE of
16.5x over the past 10 years.