Venture Corp

Venture Corp: OCBC's preferred pick within the tech sector; House upgraded to Buy rating and raised TP to $8.24 (from $7.78). OCBC believe Venture Corp (VMS) will be able to benefit from the trend of accommodative policies being implemented by major central banks and governments to support economic growth. The business sentiment of most customers has generally been positive. VMS expects improving contribution from customers secured in recent years and also the ramp-up of new programmes from a number of existing customers. Recent commentaries by some of its key customers on their outlook have largely affirmed this. However, there are still pockets of weaknesses, especially in emerging markets which are facing challenging conditions. VMS’s management had previously cautioned that it is too early to project a broad-based sustainable recovery. OCBC views VMS’s 6.7% FY14F dividend yield as an attractive investment proposition, coupled with a forecasted cyclical earnings recovery growth of 8.7% in FY14 and 11.6% in FY15.