Venture

Venture: Announced 2Q11 results, which was in-line with estimates.
Rev at $628.7m, -3.7% yoy and +7% qoq, while net profit at $42m, -3.8% qoq and +2% qoq. Net margins at 6.7% was at a sustained band over 6 consecutive qtrs.

Grp’s yoy rev drop was impacted largely by the USD/SGD decline, - 11% yoy, despite all of grp’s mkt segments recording higher vol of activities for the qtr, except the networking & communications segment. Going forward, grp note that general sentiment of customers remains encouraging with most expecting business vol growth, tipping volatility in the USD/SGD to continue impacting on business. Add that it is on track to diversify its income stream through its ODM/Solutions business.

Grp’s balance sheet remains strong, with a Net Cash Position of $136.1m or $0.50/share. Grp has declared a div of $0.55/share or 7.5% yield. At current price, valuations are compelling, with grp trading at 11.2x Ex-Cash FY11E P/E vs historical average of 14.2x and peers simple average of 15x. Kim Eng maintains Buy with $9.68 TP and BNP maintains Buy with $9.18 TP. UBS neutral and cuts TP to $7.60 from $9..20 and Nomura reaffirms Buy but reduce TP to $9.60 from $11.50.