Excerpts from CGS-CIMB report
Analysts: William Tng, CFA & Izabella Tan

VENTURE CORPORATION -- Management changes for further growth

Venture 

Share price: 
$15.66

Target: 
$18.11

■ Venture today announced that it will have separate CEOs for each of its key business segments to better support and drive their growth.
■ Venture has also appointed a new CFO and Chief Human Resource Officer.
■ Reiterate Add; TP unchanged at S$18.11.

 

Venture has two business segments


Technology Products & Solutions (TPS) Group. Venture’s TPS businesses comprise primarily the life-science and genomics domain, the custom design business (focused on leading-edge biotech and medical equipment) and the solutions & strategic modules business.

wongngitliongWong Ngit Liong is executive chairman and largest shareholder with his 7.11% stake in Venture. All these business units were recently corporatised by Venture as the Ventech Group. TPS will also oversee the precision engineering business, presently undertaken by entities under the Univac Group.

Advanced Manufacturing & Design Solutions (AMDS) group. The AMDS group of businesses are engaged in the design and manufacturing of a wide range of sophisticated electronic products, including products within the healthcare, luxury lifestyle and wellness domain, semiconductor-related equipment and modules, and several other emerging tech domains.

 What has changed?

 

● Mr Lee Ghai Keen (67 years old) was promoted from Venture’s COO to CEO on 1 Jan 2022.

● Mr Wong Chee Kheong (61 years old) was promoted from Senior Vice President responsible for the group’s healthcare and wellness business, global supply base management, and IT to COO on 1 Jan 2022.

● On 11 May 2023, Venture announced via SGX’s listed company announcement website that Mr Lee Ghai Keen will be the CEO of TPS, and Mr Wong Chee Kheong the CEO of AMDS, with effect from 1 Jun 2023. Mr Wong Chee Kheong will continue to lead Venture Group’s IT and global supplier base management divisions.

 Venture’s rationale for making this change?

 

Earnings growth

“We see potential for a resumption in its EPS growth in FY24-25F, with 4.79% p.a. dividend yield. Our unchanged TP is based on 2023F P/E of 15.1x.”

-- CGS-CIMB

● Venture feels that to distinguish and deepen the focus and drive the growth of the underlying businesses of these groups, the TPS and AMDS segments would be best led by their own respective CEO.

Other changes
● Ms Anthea Ng Lee Leng, Group Finance Director will be promoted to Group Chief Financial Officer (CFO) with effect from 1 Jun 2023.
● Ms Juliana Ang Chieh Hwee will join the company on 1 Jun 2023 as Group Chief Human Resource Officer.

 Reiterate Add

williamtng4.14William Tng, CFA.● Reiterate Add as we see potential for a resumption in its EPS growth in FY24-25F, with 4.79% p.a. dividend yield. Our unchanged TP is based on 2023F P/E of 15.1x (23-year average 12M forward P/E).

● We see new product launches by customers and improvements in component availability as re-rating catalysts.

● Key downside risks are:
a) the ongoing supply chain disruptions affecting the availability of parts and components,
b) labour shortages potentially lowering its production output, and
c) a worsening global economic outlook potentially further reducing orders from customers.


Full report here

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