CIMB Research has upgraded Singapore electronics contract manufacturer Venture Corp to neutral from underperform and raised its target price to $7.66 from $4.90.
By 9:29 a.m., shares of Venture were 2.8% higher at $8.09, and have surged about 30.5% since the start of the year.
Venture said its fourth quarter net profit fell 30% to $38 million from $54.2 million a year ago, weighed by lower sales, largely in line with CIMB's forecasts.
However, Venture‘s cash flows were strong and it ended the year with more than $300 million in net cash. This allowed it to declare a final dividend of 55 cents a share, translating to a dividend yield of 7%, CIMB said.
“The market may have priced in the weak fourth quarter and possibly first half, from its resilient share price. We think Venture deserves to trade at a higher valuation with the resumption in earnings growth in the second half,” said CIMB in a report.
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