UOB KayHian set off Venture rally, but now has some words of caution

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UOB KayHian helped extend a rally in Venture shares after pointing to a “mystery product” likely to drive the stock higher. But now it has some words of caution.

“With consensus likely to raise estimates, we expect share price to trend higher,” UOB KayHian said in a note on Thursday. “Given the outsized shareholdings of most investors, we recommend investors to gradually topslice above S$30 to lock in some gains.”

In Thursday’s report, it said earnings were just a pip above its forecasts, attributing it to the mystery product. It kept its earnings estimates unchanged, with a S$31.88 target price and a Buy call.

Last week, Foo Zhi Wei, an analyst at UOB KayHian, published a report, subtitled “This changes everything,” saying that the brokerage’s investigation had found “strong evidence” that Venture was the manufacturer of a “leading consumer device” for a U.S.-based multinational company.

The report estimated Venture would “easily” be worth more than S$33 a share if UOB KayHian’s predictions pan out.

The stock was down 2.03 percent at S$27.00 at 4:10 P.M. SGT.