Grand Venture Technology: A 136% Return for Investors Over Five Years

Those who invested in Grand Venture Technology (SGX:JLB) five years ago have seen a remarkable return of 136%. This impressive performance can be attributed to the company's strategic expansion, acquisitions, and diversification across various industries. Let's delve into the factors that have contributed to Grand Venture Technology's growth and success.



1. Expansion into the Semiconductor Front-End Segment: Grand Venture Technology's expansion into the semiconductor front-end segment has significantly contributed to its revenue growth. In 2022, the company reported maiden contributions from this segment, which, although not substantial, marked a promising start. As of 2024, the company has completed several first article inspections with new clients and launched a new facility in Penang to meet front-end semiconductor requirements. Additionally, the acquisition of ACP in early 2024 enhanced the group's capabilities in surface treatment, a crucial process for the semiconductor front-end. These developments position Grand Venture Technology well for future growth in the front-end semiconductor market, with potential contributions from new customers expected in late 2024 or early 2025.



2. Strategic Acquisitions: The acquisitions of J-Dragon and Formach in FY21 significantly impacted Grand Venture Technology's financial performance and gross margins. While revenue from the EAMO segment grew 147.0% due to maiden contributions from J-Dragon, gross margins dipped from 32.4% in FY21 to 27.3% in FY22. This decline was attributable to customer onboarding expenses and non-recurring expenses, including fair value adjustments of inventories from the newly acquired subsidiaries. Despite the temporary impact on gross margins, the acquisitions expanded the company's capabilities and customer base, setting the stage for long-term growth.

3. Diversification Across Industries: Grand Venture Technology's diversified strategy has been instrumental in its steady growth and risk mitigation. By serving multiple industries, including semiconductor, life sciences, electronics, aerospace, and medical, the company has been able to balance its revenue streams and minimize the impact of downturns in any single sector. For instance, in 2023, despite a 12.2% decline in semiconductor segment revenue, the life sciences segment grew by 12.2% (Source: Number 3). This diversification has enabled Grand Venture Technology to maintain a 136% return for investors over the past five years.

In conclusion, Grand Venture Technology's impressive 136% return for investors over the past five years can be attributed to its strategic expansion into the semiconductor front-end segment, strategic acquisitions, and diversification across various industries. As the company continues to adapt and innovate, it is well-positioned to capitalize on emerging opportunities and maintain growth in the future.