Results at a glance
Source: Company, PSR #Note – Only selected financials are provided in the 3Q22 update.
+ Broad based revenue growth. Revenue growth was broad-based across all verticals. The S$1bn revenue per quarter is back to FY17 levels and the 2nd highest for a September quarter.
– Inventory is elevated; higher effective tax. Inventory is up S$345mn YoY to S$1.25bn. The jump is to cater to rising sales demand and buffer for any supply disruptions. Another drag to earnings was the higher effective tax of 18% in 3Q22 (3Q21: 12.6%) due to lower tax incentives.
Venture is expanding capacity in Malaysia to cater to improving demand. The trend to outsource more production into SE Asia away from China is a multi-year tailwind for Venture. However, macro uncertainty could dampen customer orders in the near term.
Maintain BUY with a unchanged TP of S$20.80
Our FY22e revenue is increase by 4% but net margins lowered on declining gross margins and higher effective tax rate.