RHB on Thursday (Jul 25) upgraded Venture Corporation to “buy” from “neutral”, and raised its target price to S$16.50 from S$14.20.
The research team expects the group, which provides technology services, products and solutions, to see the tail end of its customers’ destocking phase and recover in FY2025. It previously downgraded the counter on account of the destocking situation.
Its new target price implies a potential upside of 10.5 per cent from Venture’s last trading price of S$14.93 as at 2.08 pm on Thursday. Shares of Venture were up 0.2 per cent or S$0.03 at the time.
At $16.50, Venture’s valuation is 16 times earnings, versus a peer average of 17 times. RHB said the stock is trading at an attractive one standard deviation below its forward price-to-earnings ratio.
Additionally, the research team raised its earnings forecast for FY2025 to FY2026 by a further 3 per cent. It previously priced in some recovery and now expects earnings growth of 5 to 7 per cent for the FY2025-26 period, as restocking commences in FY2025.
RHB expects longer-term growth to come from new customers in the EMS++ (electronics manufacturing services), precision engineering and Ventech Group businesses, which include customers in medical technology and lifestyle sectors, as well as “promising technology domains”.
The group previously reported that it expects new businesses from customers relocating closer to its operating locations to mitigate geopolitical risks. It is also offering differentiated and high-value solutions, supported by its manufacturing and research and development capabilities.
