Despite full-year revenue and earnings decreases, Venture’s performance improved in the fourth quarter, with net profit rising 5.1% q-o-q to $58.4 million on the back of a 2.9% q-o-q increase in revenue to $645.4 million.
In addition to raising target price to $16.80 from $13, William Tng from CGS International has upgraded the counter to “accumulate”, with PhillipCapital’s Paul Chew similarly rerating Venture to “add” at $17.04 TP from “hold” at $14.75. Meanwhile, Maybank’s Jarrick Seet maintains his “buy” call with TP raised to $18.1 from $16.6.
While increasing TP to $17.9 from $15.3, Lee Keng Ling from DBS maintains her “hold” rating on the back of gradual earnings recovery balanced out by macro and demand-visibility risks. She notes that revenue decline was mainly structural, attributed to longer replacement cycles of Venture’s products which is a testament to Venture’s R&D capabilities which improved the reliability and longevity of these products.
Separately, both Chew and Tng reasoned that revenue decline was due to forex — with Venture conducting business in the US dollar but reporting in Singdollar, the strengthening of the local currency against the greenback over the past year would have led to foreign currency translation losses and weaker results for Venture.
See also: CGS International bumps Sheng Siong to ‘buy’ on better economies of scale
For Seet, he has been expecting Venture to face an “uphill” task to maintain margins while revenue declines. Yet, he and the three other analysts observe that net margin has remained “resilient” at 9%, which they attribute to disciplined execution and cost control.
In addition, with global peers earning around 2% net margin, both Seet and Lee point out that Venture’s consistent 9% net margin leads the industry.
For Chew, he highlights gross margin of 28.1% in 2HFY2025 as a record high and attributes this to Venture’s focus on higher engineering content projects which delivers better margins at the expense of revenue.
See also: Another strong year expected for Sheng Siong
With Venture’s guidance reflecting a more positive trajectory, Chew reckons that the bottom is in sight for Venture. Noting Venture’s declining revenue over the years, he forecasts an earnings recovery in FY2026, driven by the new generation consumer lifestyle product launch in 2H2026 with networking, communications, instrumentation and semiconductor divisions benefitting from the expected scaling-up of data centres.
As such, Chew increases his FY2026 estimated patmi by 3% to $256 million and TP to $16.8, based on a higher target P/E of 19 times from 15 times.
Similarly, Tng expects not only revenue to increase in the coming year, but margins to also expand as well as demand for lifestyle products pick up. Coupled with the ongoing equity market development programme (EQDP) which Venture is a potential beneficiary, Tng believes that Venture can be valued at $17.04 or 18 times P/E which is one standard deviation from its 20-year FY2006-FY2026 forecasted average P/E.
On a similar vein, Lee rerates Venture to $17.90 or 21 times forecasted FY2026 earnings on the back of EQDP supporting valuations of companies with strong balance sheets and solid fundamentals. With a strong balance sheet backed by $1.28 billion in cash with zero borrowings as at end-2025, Lee believes that Venture is able to support dividend payouts and share buybacks.
Increasing his FY2026 and FY2027 earnings estimate by 4.8% and 4.7% respectively, Seet values Venture at $18.1 or 22 times of forecasted FY2026 earnings.
As at 12 pm on Mar 4, shares in Venture are trading at $15.25, down 21 cents or 1.4%.
