Venture Corp

Venture Corp | Buy

Fair value: $28.83

June 8 close: $21.13

Maybank Kim Eng, June 5

Venture's share price has shed 25 per cent since its April high, due to cyclical concerns and operational "opacity". However, our dashboards suggest that its customers remain confident about their 2018 prospects, anchored by robust capital expenditure spending, especially in the United States. This corroborates with what Venture has been sharing, that forecasts from its customers are healthy. Venture remains a beneficiary of economic upcycle and multifaceted secular growth drivers. In its seasonally stronger Q3 and Q4, earnings deliveries and potential improved clarity from management are expected to provide catalysts. A stronger US dollar would also be positive for Venture and Singapore tech firms. But vulnerabilities include possible wage hikes in Malaysia, higher logistics costs and a drop in its customers' outlook if trade tensions escalate.

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