SINGAPORE (July 11): OCBC Investment Research is keeping Venture Corp at “buy” with a higher fair value estimate of $9.35, up from $9.00 previously.
Post-Brexit USD strengthening
With more than 90% of Venture Corp’s revenue denominated in USD, OCBC lead analyst Eugene Chua says an expected strengthening of USD against SGD will likely boost its revenue growth in at least 2H16 and 1H17.
According to forecasts by OCBC treasury research and strategy, USD is expected to further appreciate against SGD to hit 1.4000 by June 17.
“Recall that in 3Q15, when USD saw a 5.6% appreciation against the SGD, about 55% of Venture Corp’s 15.7% y-o-y growth in 3Q15 revenue was attributable to forex movement,” Chua says in a report on July 8.
Malaysia land acquisition
Meanwhile, the electronics manufacturer and provider last week said it completed the acquisition of a 123,706 sqm plot of land in Penang, Malaysia for RM33.3 million ($11.2 million).
“We believe Venture Corp is now better poised for further expansion, especially since it has been acquiring new customers and gaining market share with existing customers over the past few years,” Chua says.
As at 1.16pm, Venture Corp is trading 0.82% higher at $8.65.