Is Venture Corporation worth S$22.70 a share?

Will Venture Corporation’s share price improve on the back of an upbeat Q2 2021 forecast?

  • Venture Corporation Ltd (SGX: V03) shares are down 4.4% to S$19.45 since Friday (30 April 2021)
  • This was despite the group reporting an 8.3% net profit growth in Q1 of 2021
  • DBS analysts reiterated a ‘buy’ on the technology solutions provider’s stock this week, while lowering price target to S$22.70
  • Venture expects a quarter-on-quarter improvement in Q2 of 2021
  • Buy and sell Venture Corp shares with an IG account

Venture Corp share price: what’s the latest?

Venture Corporation shares have declined as much as 4.4% since announcing its Q1 2021 earnings on Friday (30 April 2021).

The technology solutions provider posted an 8.3% year-on-year growth in net profit for the first quarter of 2021 to S$65.3 million. Net profit margin also grew from 9% in Q1 2020 to 9.5% in Q1 of 2021.

The widening profit margin was ‘despite tepid growth in revenue due to global parts and components shortages’, the group shared in a Singapore Exchange filing. Revenue had increased 2% to S$686.7 million in Q1 2021.

DBS analysts maintained a ‘buy’ call on the stock on 05 May 2021, while lowering their price target to S$22.70 from S$24.30 previously. The price target is pegged to a 20.5x price-to-earnings (P/E) ratio on FY2021 earnings, at a +2SD (standard deviation) of its five-year average P/E ratio.

The researchers noted that Venture’s Q1 2021 performance ‘was affected by supply disruptions for parts and components’.

Nevertheless, they believe that the company’s product pipeline remains strong, with the group working towards the launch of new products across the Instrumentation, Networking & Communications, Advanced Industrials and Advanced Semiconductor-related Equipment domains.

The analysts are also confident that the company has strong financials to support a repeat dividend per share payout of S$0.75 in FY2021. This will work out to ‘an attractive yield of c.4%’, they said.

Risks, however, include weakening client or global growth prospects due to a global economic slowdown and dampened US dollar sentiments.

What are the company’s next steps?

Earnings per share for the quarter came in at S$0.224, up 7% from the S$0.208 posted in Q1 of 2020.

Looking ahead, the group expects a quarter-on-quarter improvement in Q2 2021, as well as stronger H1 2021 performance compared to the prior year.

‘Orders from Venture’s customers are showing broad-based strength across the Group’s diverse technology domains,’ it said.

Customer orders in the Life Science Technologies, Medtech Devices & Equipment, and Lifestyle & Wellness Consumer Technology domains are ‘also coming in strong’.

Although the group is seeing a strong pipeline of orders, ongoing supply disruptions for parts and components have also led to fulfilment issues. In response, the company says it has set up several working groups to manage its global supply base.

‘In addition to regular communications with our operations teams to strategise solutions, these groups also implement joint initiatives with various external stakeholders such as our customers and partners, suppliers and components manufacturers, to secure the parts and components to meet our shipment plans,’ Venture said.

Trade Singapore's most popular stocks with IG - long or short

Create an IG account or log in to your existing account to get started now.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Explore the markets with our free course

Learn how shares work – and discover the wide range of markets you can spread bet on – with IG Academy's free ’introducing the financial markets’ course.

Put learning into action

Try out what you’ve learned in this shares strategy article risk-free in your demo account.

Ready to trade shares?

Put the lessons in this article to use in a live account – upgrading is quick and easy.

  • Trade on over 13,000 popular global stocks
  • Protect your capital with risk management tools
  • React to breaking news with out-of-hours trading on 70 key US stocks

Inspired to trade?

Put your new knowledge into practice. Log in to your account now.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.