Venture AGM 2023

Away from the conference venue, I ventured to AMK Tech Place 2 for today’s AGM adventure.

Walking to the AGM venue on the fifth floor, I am reminded of my previous workplace. In a good way that is. There is a sense of warmth in the air as the staff come together to organise the event. Maybe because they are an engineer firm, it felt less corporate and more grounded. Don’t get me wrong, the meeting room is more than adequate for AGM. Spacious and professionally set up, with a cosy reception area for coffee and tea.

Similar to the OCBC AGM, there was pre-AGM presentation session. Interestingly, the CFOs (outgoing and incoming) and finance team are the one who did the presentation. There is little to add on to what they have shared on the annual report and their repsonses to substantial questions posted earlier. If you have not read them, you can access them from their IR website.

Due to company policy, they do not reveal the type of products they work on but in general these are products which could be continuous improved and required differentiating abilities. In another word, not everyone can produce them and hence commanding higher margin. I would love to see more information on how they did in each of their domains but this is something that they don’t breakdown for the analysts or shareholders at the moment. I guess I will just to take their word for it and as long as they can keep to the current margin, then all is fine.

Interestingly again, the person who sat next to Executive Chairman Mr Wong Ngit Loong during AGM is not the CEO but the incoming CFO. I guess it’s still a transition period for CEO. I can imagine how tough it is to fill Mr Wong’s shoes. In any case, hearing how Mr Wong conducted the meeting, you can see why Mr Wong is well respected. One thing that he did which I don’t see in other AGMs was that he shared his perspective in each resolution and get the relevant director to share before proceeding to the voting. That does help shareholders to have some understanding on each resolution.

The following are some of his responses to the questions posted. Again, these are my interpretation and NOT verbatim.

On impact of current uncertainties

The main impact of current uncertainties is the growth rate of world economy and everyone is more conservative. No one can predict how long it will last but the key consideration is what can Venture do about it. He shared that on the world stage, Venture is not a super tanker but a small speed boat, so they can be more agile. They can monitor more closely and are always thinking of different pathways to do things.

An example he gave is customers requesting supply chain beyond China. He shared that building facilities in other countries is not the only solution for that. The group does look into that but would not just build a new facility for one customer. If they would to do that, the facility must benefit the group in the long term. What they have done was to redesign certain modules and because of that they can source material elsewhere.

On dividend

A shareholder asked if the board would consider 80 cents dividend next year, given the strong balance sheet the group has. So the additional 5 cents are not too much for the group. Chairman replied all money is important to Venture. He shared that when Venture was listed in 1992, they only declared 0.75 cent, so the current dividend is already 100x. Moral of the story is to keep the shares.

I think the message is quite clear from the group is the they need to strike a balance between declaring dividend and keeping the money for possible opportunities. CFO in the earlier presentation has also shared that while 800 mil sounds like a lot, it is not when it comes to acquisition. They have been consistent in their messaging of trying to sustain or increase the dividend from previous year. That can be seen in FY2020 and FY2021 where they still declared 75 cent of dividend despite the impact from pandemic.

At the end of the AGM, a few of us did manage to chat with the CEO and COO. They are always thinking of growth, whether organic or inorganic. But any acquisition must value add to the group.

My sense is that they are earnest and do a lot of thinking and working on the ground for the good of the group.

I walked away from the AGM satisfied. Do not expect quick return from investing in Venture. They are definitely not the faster grower but I am confident of stable dividend from them.


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