Venture

Venture: 3Q12 results below expectations. Revenue at $608.9m, -0.5% qoq, in line with 3Q12 results of its peers – Flextronics, Sanmina, Jabil – which pointed to a weak macro-economic environment resulting in flat to weak sales growth. Gross margins however improved, +0.4 ppt qoq to 11.8%, likely due to shift in pdt-mix, largely driven by lower volume of lower margin pdts in the RSS segment. Net profit at $32.4m, -3.3% qoq, -8.4% yoy, mainly due to a weaker USD which led to a forex loss vs a gain a yr ago. Also Venture incurred higher operating costs preparing for new business that is expected to ramp in 2013. Nomura expects 4Q12 to be muted, as noted by Venture’s peers. The house maintains Buy with TP $9.20, sees limited risk to FY12e dividend which would enable a dividend yield of 7.2%, but cautions that if the macro environment remains weak in Fy13e, there could be a potential risk to dividend payout. Maybank KE maintains Buy with TP $9.65, notes mgt guidance is positive and gaining conviction with every quarter. Highlights mgt was also confident that margins/ cashflow should improve further in 2013 as the component shortage situation is easing and the co remains confident it can further manage down inventory.