Company Coverage
Venture Corporation (VMS SP): 1H26: Momentum Supported By Demand For AI-related Infrastructure
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$16.21
S$21.10
+30.2%
S$20.65
Analyst
Analyst
Highlights
- VMS’ 1H26 PATMI of S$119.3m formed 50% of our full-year forecast, in line with expectations, supported by an improving business momentum.
- Strong AI infrastructure demand drives growth, with Portfolio B rising S$102m yoy. This was partially offset by a S$21m yoy decline in Portfolio A.
- Maintain BUY with a 2.2% higher target price of S$21.10, pegged to 23.7x 2027F PE or 3.0SD above VMS’ long-term historical mean.
Analysis
- Results in line. Venture Corporation’s (VMS) 1H26 revenue rose 7.4% yoy to S$1,354.7m, while PATMI grew 5.6% yoy to S$119.3m, accounting for 51%/ 50% of our full-year forecasts respectively, in line with expectations. Growth was driven largely by VMS’ portfolio B. Net margin declined but remained stable at 8.8% (1H25: 9.0%). Encouragingly, revenue growth accelerated to 12.5% yoy in 2Q26 compared with 1.9% yoy in 1Q26, indicating that the recovery gained momentum.
- AI, data centre and semiconductor demand drove growth. Growth was driven by Portfolio B, which recorded a S$102m increase (25.7% yoy) driven by higher demand for AI-related infrastructure as VMS secured additional business across multiple end markets. This more than offsets the S$21m decline in Portfolio A (-8.5% yoy), mainly due to lower replacement volumes in the lifestyle consumer segment.
- Higher ordinary dividend declared. VMS declared an interim ordinary dividend of 30 S cents in 1H26 (+20% yoy), representing a payout ratio of around 72% of 1H26 PATMI. Management incorporated last year’s special dividend into the ordinary dividend, reflecting improved financial performance and its commitment to sustainable shareholder returns. VMS has also repurchased about S$46m of shares under its share buyback plan to date.
Company Coverage
Venture Corporation (VMS SP): 1H26: Momentum Supported By Demand For AI-related Infrastructure
Highlights
- VMS’ 1H26 PATMI of S$119.3m formed 50% of our full-year forecast, in line with expectations, supported by an improving business momentum.
- Strong AI infrastructure demand drives growth, with Portfolio B rising S$102m yoy. This was partially offset by a S$21m yoy decline in Portfolio A.
- Maintain BUY with a 2.2% higher target price of S$21.10, pegged to 23.7x 2027F PE or 3.0SD above VMS’ long-term historical mean.
Analysis
- Results in line. Venture Corporation’s (VMS) 1H26 revenue rose 7.4% yoy to S$1,354.7m, while PATMI grew 5.6% yoy to S$119.3m, accounting for 51%/ 50% of our full-year forecasts respectively, in line with expectations. Growth was driven largely by VMS’ portfolio B. Net margin declined but remained stable at 8.8% (1H25: 9.0%). Encouragingly, revenue growth accelerated to 12.5% yoy in 2Q26 compared with 1.9% yoy in 1Q26, indicating that the recovery gained momentum.
- AI, data centre and semiconductor demand drove growth. Growth was driven by Portfolio B, which recorded a S$102m increase (25.7% yoy) driven by higher demand for AI-related infrastructure as VMS secured additional business across multiple end markets. This more than offsets the S$21m decline in Portfolio A (-8.5% yoy), mainly due to lower replacement volumes in the lifestyle consumer segment.
- Higher ordinary dividend declared. VMS declared an interim ordinary dividend of 30 S cents in 1H26 (+20% yoy), representing a payout ratio of around 72% of 1H26 PATMI. Management incorporated last year’s special dividend into the ordinary dividend, reflecting improved financial performance and its commitment to sustainable shareholder returns. VMS has also repurchased about S$46m of shares under its share buyback plan to date.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$16.21
S$21.10
+30.2%
S$20.65
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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