Venture

Venture: Maybank-KE maintains Buy with TP $8.64, highlighting that the recent 1Q14 results showed the best signs yet of a return to growth with y/y revenue growth at its best since FY07 while net profit registered its third consecutive quarter of y/y improvement. Already, Venture has delivered five consecutive quarters of y/y revenue growth, accompanied by three quarters of y/y net profit growth. The house expects the momentum to strengthen beyond FY14E and is encouraged by the fact that its customers are seeing improved business visibility. Maybank-KE sees additional earnings kicker from new customers, particularly in the life sciences arena. Even at this early stage, the prognosis is good, with four of its 12 new customers acquired in 2012 accounted for an encouraging 7-8% of 1Q14 sales, and the momentum could take it to 12% for FY14E. Venture is also gaining traction with existing customers which have enjoyed earnings upgrades year-to-date. While M&A among its customer base is a risk, the house expects a milder impact compared to 2011-2012 when there were as many as four M&A events affecting Venture at the same time. At the current price, Venture trades at 13.7x forward P/E versus peer average of 16.8x.