UOB Kay Hian's John Cheong and Heidi Mo have maintained their "buy" call and $15.55 target price on Venture Corp, on expectations that the manufacturing services firm is able to sustain its earnings and dividends.
In their Jan 21 note, the analysts say that Venture is "ready to capture opportunities from trade diversion by being agile" - as indicated previously by how the company was able to shift from largely making printers to focusing more on life science products.
Venture, according to Cheong and Mo, is also able to help customers mitigate geopolitical risks such as by sourcing for components from outside China from suppliers not owned by China-related companies.
Venture is also well positioned to capture several medium-term growth opportunities, such as in the fields of AI data centres, semiconductor equipment, life science and lifestyle consumer technology, the analysts say.
Cheong and Mo project that for the coming 4QFY2024 results, Venture will report earnings of $61 million, down 9% y-o-y but up 1% q-o-q, partly due to the high base last year as well as "softer orders".
For the current FY2025, they expect Venture to improve its earnings by 8% y-o-y.
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The company's balance sheet, as expected, remains healthy, which supports its generous and steady dividend payout.
As of 3Q24, Venture had net cash of $1.2 billion, equivalent to just below a third of its market cap. In contrast, its US-listed peers are mostly in net debt positions.
The counter is now trading at 14x FY2025 projected earnings, or 9x ex-cash, and offers a decent dividend yield of 5.9%.
Venture Corp shares changed hands at $12.73 as at 10.08 am, up 0.16%, but down 7.82% in the past 12 months.
