Venture: UOB Kay Hian maintains Buy Call with $11.88 TP. Note that after meeting with mangement, grp tip minimal impact from Jap earthquake. Venture should not be unduly affected as it was already holding a high level of inventory prior to the earthquake as it had experienced component shortage in 2010. Overall, EMS players will have to rely more on alternative sources of components outside of Jap…..
Add that shipment to Japan not sizeable. Venture focuses on enterprise and industrial applications. Its shipment to Japan is very small given that there are no new factories in Japan. Venture’s customers are predominantly US-based MNCs. Add that grp expecting strong pipeline of new products…..
Conclude that Venture provides a defensive play on a recovery in the tech sector due to its high-value high-mix business model, consistently positive free cash flow, cash-rich balance sheet and attractive dividend yield. Grp trades at Ex-cash 2012F P/E of 8.6x which are undemanding against 2012F EPS growth of 14.8%.
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