CapitaLand and Venture deliver good results, boost to portfolio

SINGAPORE (May 5): Shares of CapitaLand and Venture Corp rose in the past week, after the two companies reported their results for the first quarter of the year. CapitaLand hit a 12-month high of $3.76 on April 27, the day after it released its results. Venture climbed 6% to a record high of $12.90 on May 2, the next trading day after the release of its results on April 28. Both counters have added to the gains of our Singapore Market Portfolio. Since inclusion, the property developer and tech equipment maker have been among our best performers. CapitaLand is up 20.6% while Venture is up 27.5%. But we are not taking profit yet as we believe the duo have more to offer.

Earnings at Venture have increased 35.6% to $48.6 million for the quarter. Its revenue rose 33.7% to $843.1 million. The company attributed earnings growth to its diversified customer base, as well as some new products and programmes introduced by customers. Sales from the test, measurement, medical and life science, and others segment showed improvement, rising 79% y-o-y and contributing 52.1% of total revenue in 1Q.

Analysts say Venture’s strong 1Q results are surprising. Historically, the first quarter has tended to be a weak quarter for the company as many manufacturing plants shut down during Chinese New Year. But that trend seems to be changing. “Venture’s strategy of value creation for customers that have been in the works for the past few years is now bearing fruit, and we expect it to persist in the years to come,” says OCBC Investment Research analyst Eugene Chua. He has a “buy” call on the stock, with a price target of $13.00.

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