Venture raises dividends despite lower profits: Where next?

Analysts see a 11.4% upside on the electronics service provider’s share price, which is down 1.4% this year.

  • Venture Corporation (SGX: V03) share price rose nearly 2% after announcing its 2020 financial results last week
  • The group saw revenue grow by 17.1% year-on-year and net profit drop by 18.1%
  • The board has proposed a total dividend sum of S$0.75 for FY2020, a 7.1% increase from FY2019
  • Maybank analysts recently lowered their price target on the stock to S$22 from S$23.27
  • Trade Venture shares, long or short, with an IG account

Venture Corp share price: what’s the latest?

Venture Corporation shares opened 1.8% higher on Monday (01 March 2021), after announcing full year results for the 2020 financial year last Friday (26 February 2021).

However, the group’s share price has slid since then, even as risk-on sentiments remained across Asian markets.

Venture closed Tuesday’s (02 March) session at S$19.16 a share, with nearly 1.8 million shares exchanging hands on the day.

The stock is down 1.4% on a year-to-date basis.

Venture raises FY2020 dividends by 7.1%

The electronics services provider posted a group revenue of S$3.01 billion for the financial year ended 31 December 2020, an increase of 17.1% from the previous year.

The group said that its results reflected the steady recovery from the various disruptions caused by the global Covid-19 pandemic.

The company also recorded a net profit (profit attributable to owners of the company) of S$297.3 million for FY2020. This is 18.1% lower than the US$363 million reported in FY2019.

This translates to a net margin of 9.9% for FY2020 (against FY2019’s 10%) and 10.1% for the second half of 2020 (versus H2 2019’s 10.1%).

Venture’s board of directors has recommended a final dividend of S$0.50 per share on a one-tier tax-exempt basis for the financial year ended 31 December 2020.

Including the interim dividend of S$0.25 per share paid in September 2020, total dividend for FY2020 will amount to S$0.75 per share. This is an increase of 7.1% from FY2019’s total payout of S$0.70.

What’s the outlook for the rest of 2021?

In its earnings release, Venture says it ‘has amassed rich R&D capabilities and technical knowhow across various technology domains’.

‘Leveraging on this breadth of diverse experience, we are excited about the opportunities for us to grow in our existing domains and enter new ones,’ the company said, adding that it has made good headway in the Life Science Technologies, Medical Devices/Equipment and Lifestyle and Wellness Consumer Products domains.

The company will also continue to prioritise talent recruitment and development, as well as ramp up its bench strength to integrate new differentiating capabilities.

In terms of share price outlook, the stock has received an average 12-month price target of S$21.338, which represents an upside of 11.4% from the last traded price.

The stock also received a consensus rating of ‘outperform’ from brokers polled by SGX StockFacts.

The latest rating came from Maybank analyst Gene Lih, who maintained a ‘buy’ recommendation.

However, he lowered his price target to S$22 from S$23.27 previously, on a lower earnings forecast for 2021 and 2022 of between 4% to 5%.

How to trade Venture Corp stocks with IG

Are you feeling bullish or bearish on Venture’s stocks?

Either way you can buy (long) or sell (short) the asset using IG's industry-leading trading platform, by investing in the share directly, in a few easy steps:

  1. Create an IG Trading Account, or log in to your existing account
  2. Enter <Venture Corp> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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