+ Customer demand robust. Revenue growth was broad-based across all verticals. Some demand continues to be unmet due to supply chain challenges. Revenue in 2Q22 was the 2nd highest since 2Q18.
– Increase in effective tax rate. The higher effective tax was a negative surprise. It jumped to 18% in 1H22 due to lower tax incentives in Singapore. The effective tax was trending around 14% pre-pandemic. A possible reason for the decline in incentives is the lower CAPEX and R&D expenses over the past several years.
FY22e is on track to become a recovery year for Venture. Demand from customers is healthy and unabated, especially from last year’s disruption that included factory shutdowns in Malaysia and the inability to fulfil demand.
Maintain BUY with a higher TP of S$20.80 (prev. S$20.00)
We lift our FY22e revenue and earnings forecast by 7% and 5% respectively. Our effective tax rate for FY22e is raised from 14% to 17%.