SGX Market Updates

Health Care Sector Momentum Carried into First Week of January


PUBLISHED ON |

09 January 2018

  • Singapore’s 10 largest capitalised Health Care stocks have averaged 3.3% price gains for the first five sessions of 2018, following on from average 13.2% gains in 2017. On a market-capitalisation weighted basis, Health Care was the strongest of the Sectors in the last month of 2017.

  • Amongst these 10 stocks, Top Glove Corp Bhd, Q&M Dental Group Singapore and Tianjin Zhong Xin Pharmaceutical have performed the strongest over the past five sessions, averaging 8.3% gains. On 19 Dec, Top Glove Corp Bhd reported 44% YoY growth in Net Profit for its 1QFY18 (ending 30 Nov).

  • Clearbridge Health which focuses on precision medicine in Asia, in addition to providing laboratory and Health Care services, listed on 18 December. Its stock price closed yesterday at 46.5 cents, which was two-thirds higher than the IPO price of 28 cents.




Singapore’s 10 largest capitalised Health Care stocks have averaged 3.3% price gains for the first five sessions of 2018, following on from an averaged 13.2% price gain in 2017. As detailed in the table below, the largest capitalised stock of the Health Care Sector is secondary listing IHH Healthcare Berhad which declined 9.3% last year. At the same time, the traded value of IHH Healthcare Berhad in 2017 was up 7.4%, from a relatively low base in 2016.

As IHH Healthcare Berhad makes up more than 50% of the market capitalisation of Singapore’s Health Care Sector its performance had a significant impact on the Health Care Sector’s 6.2% market capitalisation weighted total returns last year. The next five largest capitalised Health Care stocks after IHH Healthcare averaged 19.3% price gains in 2017. The 10 largest Healthcare stocks (excluding REITs and Business Trusts) are tabled below.

Top 10 largest SGX Listed Healthcare stocks
Name SGX
Code
Market
Cap
S$m
Last
Price*
Price Change
2017 %
Price Change
YTD %
IHH Healthcare Q0F 16,066 1.95 -9.3 0.5
Top Glove Corp Bhd BVA 3,816 3.04 63.6 12.6
Haw Par Corp H02 2,619 11.9 24.9 4.8
Tianjin Zhong Xin Pharmaceutical T14 2,055 0.97 -3.4 5.7
Raffles Medical Group BSL 1,966 1.11 -21.7 -0.9
TalkMed Group 5G3 913 0.695 33.3 2.2
Riverstone Hldgs AP4 800 1.08 22.7 0
Health Management Intl 588 561 0.67 3.6 1.5
Q&M Dental Group Singapore QC7 521 0.655 -14 6.5
Singapore Medical Group 5OT 261 0.575 32.2 0
Average 13.2 3.3

Note: Riverstone Holdings is not categorised to the GICS® Health Care Sector.
Source: SGX StockFacts, Bloomberg (Data as of 9 January 2018).



Top Glove Net Profit for 1QFY18 (ending 30 Nov) up 43.9% YoY

Of the 10 stocks tabled above, secondary listing Top Glove Corporation Berhad was the best performer over the first five sessions of 2017, in addition to 2016. For its 1QFY18 (ending 30 Nov) the Group reported its highest-ever quarterly sales revenue, at RM938.1 million, which represented a YoY increase of 19.4%. Its profit after tax, at RM105.9 million, rose 43.9% YoY. Management also reported that sales volumes (in terms of quantity sold) demonstrated growth of 17% YoY, which was led by nitrile glove sales volume. For more details click here.

The comparative price performances of the two REITS and the Business Trust investing in Health Care related properties are tabled below.


SGX Listed REITS & Business Trusts investing in Health Care-related properties
Name SGX
Code
Market Cap
S$m
Last
Price*
Price Change
2017 %
Price Change
YTD %
ParkwayLife REIT C2PU 1,803 2.98 26.7 -0.3
First REIT AW9U 1,092 1.4 9.9 0.7
RHT Health Trust RF1U 675 0.835 -8.2 -0.6
Average: 9.5 -0.1

Note: ParkwayLife REIT and First REIT are REITs, whilst RHT Health Trust is a Business Trust. For more information on both asset classes, click here.
Source: SGX StockFacts, Bloomberg (Data as of 9 January 2018)



Clearbridge Health up 66% from IPO Price

On 18 December, Clearbridge Health listed on Catalist raising S$24.6 million and opening with market capitalisation of S$134.7 million. The stock ended yesterday at 46.5 cents, which was two-thirds higher than the IPO price of 28 cents.

Clearbridge Health specialises in the delivery of precision medicine in Asia in addition to providing laboratory and Health Care services. Its precision medical technology businesses include Clearbridge BioPhotonics which develops the next generation microscope technology; and Clearbridge BioMedics, which developed the ClearCell® FX System - one of the world’s first fully automated cell retrieval systems.



Comparative Sector Returns in 2017

As illustrated below, Singapore’s Cyclical Sectors all performed better than the Defensive Sectors in 2017.

2017 Indicative Market Cap-weighted Total Returns of 12 GICS® Sectors & Key Industries (%)
2017 SGX Indicative Market Cap-weighted Total Returns of 12 GICS® Sectors & Key Industries (%)

Note: Delong Holdings 814% gain in 2017 accounted for more than half of the gains for the Materials Sector (or 43% of the 83%) in 2017, implying the remainder of the Materials Sector gained 40%.
GICS® Sector performance is weighed to market cap at the end of each period, is in SGD and includes reinvested dividends.
Source: SGX StockFacts & Bloomberg.



Performances of the seven Cyclical Sectors ranged from a 107% market capitalisation weighted total return for Information Technology (“IT”) to a 17% market capitalisation weighted total return for Industrials. There was a 1% performance differential between the least performing Cyclical Sector (Industrials) and the best performing Defensive Sector (Utilities), which narrowed from a 7% differential as of the end of October

The Health Care Sector was the strongest of the Sectors in the last month of 2017, with market capitalisation total returns of 4.7%. The Sector has added 2.9%, using the same metrics, over the first five sessions of January 2018.

As noted above, market capitalisation weighted returns of the Health Care Sector are mostly weighted to the returns of IHH Healthcare Berhad as the stock accounted for 52% of the Health Care sector’s combined market capitalisation as of the end of 2017. By comparison Top Glove Corporation Berhad and Haw Par Corporation respectively accounted for 11% and 8% of the combined capitalisation.



2017 Indicative Monthly Market Cap-weighted Total Returns of 12 GICS® Sectors & Key Industries (%)
2017 Indicative Monthly Market Cap-weighted Total Returns of 12 GICS® Sectors & Key Industries (%)

* Note: Delong Holdings’ 145.0% gain in October accounted for almost three quarters of the gains of the Materials Sector (or 10.9% of the 15.2%) implying the remainder of the Materials Sector gained 4.3%.
For monthly data, the Indicative GICS® Sector performance is weighed to market cap at each month end, is in SGD terms and includes reinvested dividends.
Source: SGX StockFacts & Bloomberg.



The indicative sum of the best performing sectors for each of the 12 months across 2017 was a total return of 88%. As illustrated above, the 88% total return, weighed to market capitalisation, started with the Industrials Sector returning 7.5% in January and ended with Health Care adding 4.7% in December. The combined decline for the least performing Sector of each of the last 12 months was 37%. By comparison, over the 12 months the STI generated a total return of 22%. Note this does not include any transactions fees which would be associated with the sector rotation.







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