Stock Upgraded: Venture upgraded from sell to neutral by ML

Merrill Lynch has upgraded its rating on Venture Corp Ltd to "neutral" from "sell", citing the company's improving fundamentals, with progress into high mix, high-value businesses supporting better margins. "Venture Corp's fundamentals have been improving gradually starting second quarter this year, and we anticipate continuous margin improvement for the second half of this year onwards," the brokerage said in a note. Hence, Merrill Lynch said it is expecting Venture to post a solid second half, with revenue of 1.62 bln sgd, up 9 pct from the first six months of the year and net profit of 129 mln sgd, up 27 pct from the first half, led by a seasonal pick up in printing and imaging, stronger-than-expected data storage orders and more design driven businesses for test and measurement segment. The brokerage also raised its net profit estimates by 9 pct to 231 mln sgd for 2006 and by 4 pct to 246 mln for 2007 to factor in higher margins. But Merrill Lynch said it remains cautious about integration risk associated with Venture's acquisition of GES International. At 11.21 am, Venture was down 0.20 sgd or 1.37 pct at 14.40 on volume of 1.17 mln shares.