Results at a glance
Source: Company, PSR #Note – Only selected financials are provided in the 1Q22 update.
+ Revenue building up momentum. Revenue momentum has picked up since 4Q21. Revenue is recovering to pre-pandemic levels as factory closures and supply chain disruptions over the past two years start to ease. Due to long lead times and shortages, Venture has managed to re-design products with alternative components.
– Inventories spiked almost 70% YoY to S$1.1bn. To support customer orders, Venture needs to hold inventories of semiconductors, materials and other components. It is a near-term drag on working capital. Both receivables and inventory are up S$680mn YoY. The additional working capital required was $370mn to fund the $283mn increase in revenue over the past 12 months as payables jumped by S$305mn. Net cash dropped to S$815mn from S$989mn a year ago.
We expect FY22e to be a recovery year for Venture as: (i) There is order visibility as customers make longer-term commitments to ensure supply; (ii) Growth is broad-based across six of their seven key industries; (iii) Rebound from last year’s factory shutdown in Malaysia; and (iv) New products gaining more traction with customers, namely in life science and lifestyle and wellness.
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Our FY22e revenue and earnings forecast are unchanged.