+ Healthy balance sheet and margins. Net margins improved marginally to 10%. We assume the high-value low mix projects have been sustaining margins despite the weaker revenue and loss of operating leverage. Net cash was S$853mn at 3Q21. There was a spike in inventory by S$154mn YoY to S$908mn. We believe there is buffer inventory to cope with the unpredictability in component supply.
– Another weak quarter in revenue. Pre-pandemic, the quarterly run-rate in revenue was around S$900mn. This has dropped to S$700m this year. Venture has struggled to keep revenues to pre-pandemic levels these past two years despite the global resurgence in electronics demand. The pivot to life science and consequent long timeline to ramp up is a factor, in our opinion. We expect revenue to rebound in 4Q21e to S$916mn, an 11% YoY rise.
Venture commented that new product introductions are expected to flow to mass production over the next 12 months.
Maintain NEUTRAL with unchanged TP of S$19.20
Our FY21e and FY22e PATMI is lowered by 10% and 11% respectively