Venture Corp

Venture Corp: UOB Kay Hian upgrades to Buy and lifts TP to $9.30 from $7.60. House note that an accelerated transfer of production from Shenzhen to Penang for Oclaro will boost contribution from Networking & Communications. Visibility has improved with production of MEMS-based mobile printer and bi-directional fibre optics components scheduled to commence in 3Q13. Conlude that Venture has a resilient business model focusing on high-value, high-mix products with high engineering and design content. The business provided positive free cash flow and a strong balance sheet with net cash at $227.4m or $0.83/share. Mgt intends to maintain a dividend payout at 55c /share for 2012. The stock provides a lucrative dividend yield of 7.1%. It is a potential beneficiary of yield compression due to its resilient business model and stable and attractive dividend yield.