Venture Corp

[Bibi]

I expect 4Q profit to be slightly better than 3Q. Maybe about S$48 to 51mil. 2 things I didnt quite like what i see.
1) Employee expense rising faster than revenue.
2) Company have been giving out share options quite aggressively.

[Bibi]

The latest quarter result blew my expectations. I was expecting total profit 177mil but it came up to 180mil. But if we add back the non-recurring legal settlement fee due to a dispute from a customer, it will become 206mil.

So the concern now is, what is the reason behind the 26mil dispute between venture and the customer? Was it venture unable to meet prj schedule? Or unable to meet challenging specs? Or some other reasons.

If anyone intends to attend the AGM or come across coming analyst reports regarding this 26mil settlement issue, don't mind post it here?

[egghead]

Venture price has run up yesterday and today perhaps on speculation that it may be chosen to replace GLP in the STI.

[shadow_walker]

For many years, Venture has been a stable dividend play.

However, the company has been undergoing a transformation with a shift towards higher margin & growth segment in the Test & Measurement/Medical & Life Science/Others. Revenue for this segment has doubled in the past 5 years and revenue contribution is 40% in 2016. The traditional segments of Printing & Imaging, Computer Peripherals & Data Storage have declined significantly to be in the teens in contribution.

Customers in the life science and test measurement have been rumoured to be Illumina, Thermo Fisher, Agilent according to various sell side reports.

From the 2016 AR - "Since 2012, the Group has worked in close collaboration with a global leader in next-generation sequencing equipment. In late 2015, the Group was once again selected to work alongside this customer on a ground-up development project which has since been launched in early 2017. The introduction of this latest sequencer by the customer is expected to disrupt the current user-base given its superior sequencing
architecture, offering unrivalled throughput, ease of use, low per sample costs and unmatched flexibility."

This is a reference to Illumina, the global leader in next-generation sequencing. The project launched in early 2017 is NovaSeq with total shipment of 285 units in 1 year. The ASP of each unit is US$ 985,000. The revenue potential is huge for Venture. Novaseq has exceeded expectation for Illumina and the company has described it as a multi-year adoption cycle. https://sapac.illumina.com/content/dam/i...y-2018.pdf

Venture should announce a very strong 4Q results. I expect the life science segment to rise to >50% of revenue in 2017 as it is likely the key driver of Venture's strong growth in 2017. The chairman has raised his number of shares by 1 million since the last reported number in 2016 AR.

[specuvestor]

Venture is into very niche low volume products with even ASIC capabilities. It is not in the same business as Foxconn. What that means is that revenue is difficult to cross $S1b inflation adjusted per quarter, but stable strong cashflow depends largely on customisation capabilities.

NL Wong has been very prudent to the extend of being "ngeow". The CDO fiasco is largely the ex CFO issue. The structure was extremely weird according to the current CFO. It defaults when 3 of the credit defaults. And they actually tell me it is less risky as the list of credit exposure is more than 100???? Err I think that means probability INCREASED not decreased. In short, they went into something they don't even understand except for the yield, like many retailers did.

In 2Q the revenue actually propelled above S$1b

In retrospect the strong indicator was "Ngeow" L Wong actually bought the stock first time in years

[holymage]

Lol specuvestor, I don't know much about Wong NL, but why do you repeatedly say he is "ngeow"? Anyhow, I think ngeow management is good for shareholders. Any interesting tidbits about Mr Wong that you don't mind sharing?

[specuvestor]

There is no insight in his investor briefing cause he is always vague... better talk to his lieutenants

[Big Toe]

Venture is on a roll now and NL Wong probably wanted to leave on a high and go for a home run. He is no longer young, in his 70s.
Ngeow is an understatement. Management (generally) is extremely cautious and prudent. Could well afford spanking new offices and buildings, instead, most of its facilities are leased and old or bought on the cheap in Msia. It doesnt give a hoot about image, prudence and profit takes priority.

It is a money printing machine, but that doesnt mean it is an easy business to be in. It is in fact one of the worst business to be in.
All are project basis and hungry wolves are everywhere trying to take away that piece of meat. Kudos to them for being able to run such a profitable company for so long.

[shadow_walker]

http://venture.listedcompany.com/newsroo...ZHNH.3.pdf

Profit went up by 164% in Q4, equivalent to 3/4 of Venture's full year profit last year.

As expected, the Test & Measurement/Medical & Life Science/Others is now >55% of revenue, having nearly doubled this year. Illumina certainly plays an important role in the revenue growth.

However, the dividend is a disappointment with the level of free cash flow. With the acquisition of the property site in USA, Venture could be keeping the cash flow to grow its presence in USA. Coincidentally, 481 Cottonwood Drive is very near to Illumina's sites in San Francisco.
https://sapac.illumina.com/company/conta...tions.html

The strong performance of Venture should continue into the next few quarters.

[specuvestor]

To be fair I heard the employees are well remunerated, turnover is low

Venture is on a roll now and NL Wong probably wanted to leave on a high and go for a home run. He is no longer young, in his 70s.
Ngeow is an understatement. Management (generally) is extremely cautious and prudent. Could well afford spanking new offices and buildings, instead, most of its facilities are leased and old or bought on the cheap in Msia. It doesnt give a hoot about image, prudence and profit takes priority.

It is a money printing machine, but that doesnt mean it is an easy business to be in. It is in fact one of the worst business to be in.
All are project basis and hungry wolves are everywhere trying to take away that piece of meat. Kudos to them for being able to run such a profitable company for so long.