SINGAPORE (Feb 8): CIMB is maintaining its “add” call on Venture Corporation with a target price of $29.13.
Preliminary estimates released by the US government showed that the nation’s output increased at an annual rate of 2.6% in 4Q17 and since more of the group’s customers are US corporates, the research house believes that the group is on track for a strong FY17.
Meanwhile, Venture Corp on Jan 18 announced its first substantial investment in the US in monetary terms.
See: Venture unit to acquire California property for $39 mil
In a Thursday report, analyst Willian Tng believes that the freehold property the group acquired in California is significant.
Following the acquisition of this property, the group intends to renovate it to offer a new platform enterprise that will forge new alliances, partnerships and ventures that will allow the group to take part in advanced new technologies and business from US corporates.
“We believe the facility will eventually offer a mix of prototyping and high mix, low volume production,” says Tng.
In addition, the analyst assumes that the group will pay a higher DPS for FY17 of 60 cents – 50 cents per its track record and 10 cents from the sale of its stake in an investment.
Tng believes that the way the group plans to frame its FY17 DPS would catch investor’s attention, as terming it a final DPS – instead of a base final DPS and a special DPS – would lend further supper to his optimistic earnings forecast.
As at 10.22am, shares in Venture Corp are trading 18 cents lower at $22.11 or about 2.7 times FY18 book with a dividend yield of 2.69%.
