Comprehensive Analysis of Market Performance and Company Insights
Broker: Lim & Tan Securities
Date: 24 February 2025
Market Overview
The financial markets have exhibited mixed performances recently, with the FSSTI Index closing at 3,927.5, reflecting a slight decline of 0.2% in one day but showing gains of 1.9% month-to-date and 3.7% year-to-date. In contrast, US stocks fell significantly, with declines ranging from 1.7% to 2.2%, attributed to disappointing consumer sentiments and weak results from major retailers such as Walmart.
Company Analyses
Venture Corporation Limited
For FY2024, Venture Corporation registered a revenue of S\$2,735.9 million, marking a 9.6% decrease year-on-year due to softer customer demand. Despite this dip, the Group reported a net profit of S\$245.0 million, achieving a net profit margin of 9.0%, consistent with market expectations.
Venture’s performance showed resilience, particularly in the Networking & Communications and Advanced Industrial technology domains. However, the Lifestyle Consumer technology domain faced challenges due to unexpected lower demand. Comparing the second half (2H) of 2024 to the first half (1H), revenue declined by 2.3%, yet the net profit margin improved, highlighting operational efficiency.
The Group generated operating cash flow of S\$300.1 million before working capital changes and maintained a robust balance sheet with zero debt. As of December 31, 2024, the net cash balance rose by 24.7% to S\$1.3 billion compared to the previous year. The Board proposed a final dividend of 50 cents per share, leading to a total payout of 75 cents for FY2024, which reflects an increased payout ratio from 81% to 89%.
Venture’s share buyback plan, initiated in November 2023, is set to accelerate, with the company having purchased 1.7 million shares so far. Venture is rated “Accumulate on Weakness,” supported by its attractive dividend yield and strong financial metrics.
CNMC Goldmine Holdings Limited
CNMC Goldmine reported earnings of US\$9.8 million for FY2024, more than doubling its profits from the previous year. The revenue rose by 25% to US\$65.2 million, driven by soaring gold prices and increased sales of lead and zinc concentrates. The average selling price of gold reached US\$2,661 per ounce in the second half of 2024, significantly higher than the previous year’s figures.
On a pre-tax basis, CNMC achieved a record profit of US\$17.7 million for FY2024. The improved performance enabled the company to generate US\$20.5 million in net cash from operations, up from US\$13.7 million year-on-year. CNMC proposed a final dividend of 0.4 Singapore cent per share and a special dividend of 0.6 Singapore cent per share, resulting in a total payout of 1.4 Singapore cents per share for FY2024, which is 55.6% more than the previous year.
Looking ahead, the company aims to expand its processing capacity at its Sokor mine and has plans for additional underground mining facilities to enhance gold output. The market cap stands at S\$134 million, trading at 9.9x P/E and 2.0x P/B, with a dividend yield of 4.2%. Analysts maintain a “BUY” recommendation on CNMC, anticipating its benefitting from ongoing high gold prices.
Dividend Insights
Several companies have announced dividends, with notable mentions including:
- Venture Corp: 50 cents Final dividend
- UOB: 92 cents Final & 25 cents Special dividend
- DBS: 60 cents Final dividend
- Sasseur REIT: 2.929 cents Final dividend
Fund Flow Data
Recent fund flow data highlights retail investors’ movements within various sectors. The Consumer Cyclicals and Non-Cyclicals sectors saw net buying, while the Healthcare sector experienced significant net selling.
Overall, retail investors have shown a mixed sentiment across sectors, indicating a cautious yet active trading environment.
Conclusion
The market overview and company analyses provided a glimpse into the current financial landscape, showcasing how companies like Venture and CNMC have navigated operational challenges while maintaining strong financial health and shareholder returns. The recommendations reflect a positive outlook on these companies, emphasizing their resilience and strategic focus on growth.
