Venture Corportion: A Closer Look at Venture Corporation's FY22 Performance and Future Prospects

Venture Corporation - with FY22 ended on a positive note

Venture Corporation Limited (SGX:V03) recently reported its FY22 results, with net profit of $369.6 million, which was in line with expectations and slightly beat consensus forecasts of $368 million. 

The growth in healthcare and wellness, high sciences, and test and measurement divisions, along with a healthy balance sheet, contributed to Venture Corporation's overall performance. Despite supply chain constraints and inflationary pressures, these divisions were significant contributors to the company's performance.

chart created using trading view

Chart 1: Venture plotted against PE Ratio (Monthly)

Although the technology sector's outlook is not as bullish as it was early last year, Venture Corporation's fundamental recommendation is maintained. The company's valuation is twice market cap, with a dividend yield of 4.4% and a price-to-book of 1.8 times. Despite the forward PE ratio being below its five-year historical average of around 16 times, the company is expected to register modest growth in FY23.

In 4Q22, Venture Corporation's revenue growth was across all domains. According to some esitmates, the company's expansion in Penang is expected to be completed by the end of 2023, and it plans to tap into the new influx of companies setting up plants in Penang to gain more customers, especially those with factories near its plants. Venture Corporation aims to enhance its competitive edge in the market by developing more unique and specialized capabilities than its peers. By doing so, the company hopes to establish a long-term relationship with its customers and achieve greater control over specific product modules or sections that it manufactures.

Venture Corporation's declared a FY22 dividend of S$0.75, which aligned with the projected amount. Despite anticipating macroeconomic headwinds that may make FY23 a challenging year, the company's management remains optimistic about its long-term outlook.

In Conclusion

Despite the challenging supply chain and inflationary conditions, Venture Corporation Limited has maintained its excellent performance. The growth in the company's healthcare and wellness, high sciences, and test and measurement divisions, combined with its strong financial position, have played a crucial role in its overall success. Although the macroeconomic environment poses challenges, Venture Corporation's management is optimistic about the company's long-term future, and it is anticipated to experience moderate growth in FY23.

Note: Venture Corporation Limited, listed on the Singapore Stock Exchange, is a leading global provider of technology services, products, and solutions with established capabilities in design and development, supply chain management, and product engineering, and was IPO in 1992