Venture Corporation

Venture Corporation: CIMB maintains OutPerform with $8.92 TP. Note that discussions with Venture suggest that business remains soft in 3Q12, which house believe should not surprise the mkt. Rather, would advise investors to look beyond its muted 2012, to a better 2013. Venture’s customers remain guarded about 2H’s outlook because of the overall uncertain macro environment. Through recent conversations, sense that business so far has been as muted as it was in 2Q12. All product segments are soft with the exception of industrial products, whose sales are still growing at double digits. According to Venture and channel checks, maiden shipments to its new customer, Oclaro, could start in 4Q12. As Venture is working closely with the latter to kick-start more new projects, believe maiden 12-mth contributions from Oclaro (which had completed its acquisition of Opnext at end-Jul) will reignite its rev and profit growth in FY13. Grp has also started a new working relationship with VeriFone (acquired one of Venture’s main customers, Hypercom, in 2H11), shipping small volumes currently. It hopes to collaborate more closely with VeriFone, which has a much wider product reach than Hypercom.