Venture

Venture: Maybank-KE reiterates its Buy call with TP $8.70. Notes that in its recent non-deal roadshow, every single client was interested in the company’s budding 3D printing business. Management says that 3D printing is still a new concept, hence growth contribution projects at this juncture may be premature, but Maybank-KE believes the business could grow faster than expected. One of Venture’s highest value-added activities will likely be in the area of material delivery, given its long expertise in ink delivery mechanisms for 2D printers. The house hypothesizes low-single digit revenue contribution in FY14 and a more substantial high-single, if not double-digit contribution in FY14, particularly as the industry is aggressively striving to broaden the market and lower price points. For instance, Stratasys, a leading US 3D printer company, recently guided for revenue of US$660-680m in 2014. In comparison, Venture recorded 9M13 sales of $2.3b. Once the product goes into mass production, Venture could easily achieve a normalized 20% gross margin and 6-8% net margin, considering that it typically earns 25-45% at the gross level for ODM business.