Here's why Venture Corp expects robust results the next quarter

Its CEO just bought $9.5m of its own shares.

Venture Corporation's chief executive officer (CEO) bought $9.5m of its own shares, showing a potential for robust results ahead, RHB revealed.

Venture's profit before tax (PBT) margin in Q2 continued to rise to 8.3%.

RHB said the margins could improve through a shift in the revenue mix to higher-margin projects and continued efforts to upgrade operational efficiencies to lower costs.

However, Venture's distribution per share (DPS) has stayed at 50 cents despite the recovery in its results.

But due to its H1 results, dividends may increase to reward shareholders should it maintain its performance.

RHB said the DPS could rise by 20% to 60 cents and reflect 3.5% full-year dividend yield.

Here's more from RHB:

Venture’s CEO Mr Wong Ngit Liong has been exercising his employee share option, which was granted to him in Mar-Apr 2017.

In addition, he also purchased shares on the open market multiple times – twice in July (worth up to SGD3.4m, before its 2Q17 results announcement, which were exceptional).

He purchased another block of shares worth SGD6.1m in September, just before its 3Q17 results are scheduled to be announced in October.

We view these transactions as a strong testament to the company’s fundamentals and results ahead.

With the strong insider buying and macroeconomic demand continuing, we expect its 3Q17 results to strengthen QoQ. With the continued value creation, coupled with new major product launches ahead in 4Q17, we expect this positive momentum to likely continue into 3Q17.

As a result, we lift our FY17F-18F PATMI by 10%.

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