UOB Kay Hian is upgrading its call on Venture Corporation to “buy” with a higher target price of $23.76 from $17.64 previously, as its clients are seeing better growth prospects.

Although full-year earnings guidance from most of Venture’s clients remain withdrawn - citing high levels of uncertainty, consensus revenue forecasts show expectations of a strong recovery in 2021, to levels comparable or higher than 2019’s for key clients in the group’s Test & Measurement  and Life Sciences/Medical domains, with expectations of a 7.9% and 18.8% growth respectively.

In an Oct 1 report, lead analyst John Cheong says, “We estimate these domains (including contribution from “I quit ordinary smoking” (IQOS) devices) form more than 50% of the group’s revenue. Other domains that we think Venture could see more traction include semiconductor-related equipment and networking & communications.”

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