| The share price ($13.88) of Venture Corp is slightly higher than at the start of the year ($13.61). The tepid performance belies the fact that Venture booked the highest net institutional inflow within the iEdge SG Advanced Manufacturing Index. This index comprises more than 110 Singapore-listed stocks across multiple industries. There is some upside to the Venture stock going by the Refinitiv Consensus Estimates target price for Venture being currently S$15.115. |
In contrast to Venture's stock performance, according to SGX data, the manufacturing outperformers year-to-date are:
 Cafe Pho: This is Food Empire's No.1 instant coffee brand in Vietnam.• Food Empire: 23.9% (net y-t-d institutional inflow: -S$1.5 million).• Yangzijiang Shipbuilding: 12.8% (net y-t-d institutional inflow: S$33.2 million). • UMS: 9.0% (net y-t-d institutional inflow: S$2.4 million). • Frencken: 5.2% (net y-t-d institutional inflow: S$0.8 million). These examples suggest that sometimes there is little correlation between net insti fund flow and stock price movement. A key factor is the fund flow versus the market cap of the stock. |
 Venture Corporation • Designs and develops a variety of products and solutions • Wide range of customers across life science and genomics, healthcare and wellness, and test and measurement instrumentation. • Headquartered in Singapore. • Group comprises more than 30 companies worldwide with Centers of Excellence in Southeast Asia, Northeast Asia, America, and Europe. |
According to SGX data, Venture stock saw S$43 million of net inflow year-to-date.
This builds on the S$62 million in net inflow in 4Q23, which might reflect funds positioning for a recovery year in 2024.
The aggregate five months of inflow sees the stock up 12% since the start of 4Q23.
The inflow reverses an outflow in 9M23 which happened to a number of tech stocks.
In Venture's case, the net fund outflow was a whopping S$292 million in 9M23, leading to a precipitous 33% plunge in the stock at its lowest point in Oct 2023.
This corresponded with 9M23 y-0-y business woes:
• Revenue fell 19% to S$2.3 billion.
• Net profit fell 25% to S$203 million.
Factors contributing to the decline included a high base in 2022, and soft customer demand and ongoing inventory destocking.
| On the positive side, Venture's net cash position has improved over the past four years, reaching S$956.5 million as of 30 September. It highlighted back in November that it continues to generate strong cash flow through operating performance and working capital optimisation. With S$0.75 per share distributed in dividends for each of the past four financial years, Venture Corporation currently maintains an indicative dividend yield of 5.4%. |
Management noted in November its new product introductions with both existing and new customers are on track to be rolled out in 2024.
The adoption of Venture module solutions by its life science and industrial customers was also picking up pace, which will complement its core Electronic Manufacturing Services (EMS++) business going forward.
Venture Corporation will report its FY23 results after the 22 February close.
