Venture Corp

Venture Corp: Reported strong 4Q10 and FY10 results which were in-line with consensus, with 4Q10 Rev at S705.5m, -22.7%YoY, but +4.1%QoQ, while Net Profit at $54.2m, +223.1%YoY (one-time non-operational charge in 4Q09) and +11.5%QoQ. Result brings FY10 Rev to $2.68b, -21.6%YoY, while Net Profit at $188.3m, +31.3%YoY and almost exactly in-line with consensus estimates of $187.8m....

YoY rev decline for FY10 was anticipated, given Grp’s earlier guidance on business mix, as it pares down the low margin HP consumer printer products and shift towards tech services, products and solutions with greater design and engineering content, which registered sequential margin improvements. FY10 Net Margins at 7% vs 4.2%YoY. Grp’s improved profitability profile largely reiterated that its strategic direction is panning out well.....

Going forward, Grp appears confident of its prospects and will expand its capabilities, enhance its operational excellence and growing its technology and enlarge its network of market access....

We note that grp balance sheet remains strong, with a Net Cash Position of $238.5m ($0.86/share), providing headroom for possible ongoing expansion and acquisitions. At current price, grp trades at 13.5x, while on an ex-cash basis, grp trades at 12.2x, vs peers average of 16x and historical average of 14.5x, suggesting stock still has further upside. Grp has declared a final dividend of $0.55/share, translating to a 6% yield…..

BNP Paribas maintains Buy with $10.62 TP.