SGX Market Updates

10 Best-Performing Industrials Stocks Avg 13% Total Return in 2018


04 January 2019

  • Last year, SGX’s Industrials Sector was the second best-performing segment with a market cap-weighted average total return of 1.0%, following the Materials Sector’s market cap-weighted average total return of 30.1%.

  • SGX lists more than 200 Industrials stocks. The 10 best performers with a market cap of over S$200 million have averaged a 2018 total return of +12.7%, bringing their 3Y and 5Y total returns to +48.5% and +86.5% respectively. In comparison, the 30-constituent benchmark STI registered a total return of -6.5% in 2018.

  • Among the 10, the 3 best performers were Cityneon (+39.0%), Keppel T&T (+21.2%) and Jardine Matheson (+19.8%). The trio averaged a 2018 total return of 26.7%.

SGX lists more than 200 stocks in the Industrials Sector, which was the second best-performing segment in calendar year 2018 with a market capitalisation-weighted average total return of 1.0%. This follows the Materials Sector’s market cap-weighted average total return of 30.1% over the same period.

The 10 best-performing Industrials stocks with a market capitalisation value of over S$200 million have a combined market cap of about S$87 billion. They have averaged a 2018 total return of +12.7%, bringing their three-year and five-year total returns to +48.5% and +86.5% respectively. In comparison, the 30-constituent benchmark Straits Times Index (STI) registered a total return of -6.5% in 2018.

The 10 stocks are involved the following businesses: industrial conglomerates, construction & engineering, air freight & logistics, transportation, aerospace & defence, human resource & employment services, as well as diversified support services.

Among the 10, the three best mid- and large-capped performers were Cityneon Holdings (+39.0%), Keppel Telecommunications & Transportation (+21.2%) and Jardine Matheson (+19.8%). The trio averaged a 2018 total return of 26.7%.

The table below details the 10 best-performing Industrials stocks with market cap above S$200 million, sorted by 2018 total returns.

Name SGX
Ind Yld
CITYNEON HOLDINGS 5HJ 315.6 39.0 300.0 570.9 NA 13.9
KEPPEL T&T K11 1,045.6 21.2 38.0 44.6 1.9 16.3
JARDINE MATHESON J36 67,232.3 19.8 48.0 62.4 2.4 9.6
COMFORTDELGRO C52 4,589.8 13.7 -20.5 28.4 4.8 16.4
ST ENGINEERING S63 10,794.5 11.8 31.9 9.5 4.3 20.0
SBS TRANSIT S61 841.3 11.7 50.2 128.3 3.6 12.2
VICOM LTD V01 531.0 9.7 16.9 55.5 6.1 19.5
HRNETGROUP LTD CHZ 784.5 7.7 NA NA 2.9 17.0
BOUSTEAD SINGAPORE F9D 391.9 -3.4 5.4 -34.4 3.8 11.5
BOUSTEAD PROJECT AVM 258.6 -4.2 15.0 NA 1.8 8.3
Average 12.7 48.5 86.5 3.2 14.5

Source: Bloomberg & StockFacts (data as of 31 December 2018 and 3 January 2019)

In comparison, the 10 least-performing Industrials stocks with market cap above S$200 million have averaged a total return of -35.0% over the past year.

2018’s Three Best Performers

Looking broadly at the Industrials Sector, the three best performers over the past year were small-capped stocks below the S$100 million market cap. They were: Far East Group (+140.9%), KTL Global (+132.0%) and MMP Resources (+75.0%). The trio averaged a 2018 total return of 116%.

Far East Group Boosts War Chest, R&D Efforts

For the six months ended 30 June 2018, Far East Group reported a net attributable profit of S$26.9 million, up from S$248,000 in the year-ago period. Revenue declined 5.3% YoY to S$16.3 million.

The company noted that its recent research and development (R&D) efforts have paid off, following the roll-out of another two new ranges of heat exchangers that includes use of natural gas to cut down its carbon footprint. With the sale of two properties in Singapore and one property in Malaysia, the Group now has a war chest to enhance and streamline its existing business and explore opportunities for mergers and acquisitions. For the full results statement, click here.

Founded in 1953 as one of the pioneers in the refrigeration and air-conditioning business in Singapore, Far East Group is a comprehensive provider of refrigeration and air-conditioning systems and products in the heating, ventilation, air-conditioning and refrigeration industry. 

KTL Global Restructures, Cuts Costs

For the three months ended 30 September 2018, KTL reported a narrower net loss of S$1.4 million, compared with a S$2.3 million net loss in the year-ago quarter. Revenue fell 16% YoY to S$9.3 million.

With the stabilisation of oil prices, the Group has seen an increase in orders from its Middle East and Indonesian customers. However, the O&G market is still characterised by oversupply, and the Group expects challenging conditions to continue for the next 12 months. For the full results statement, click here.

In response to SGX queries raised on 30 November 2018, KTL’s board of directors said it believes the Group and the Company are able to meet their short-term debt obligations and continue to operate as going concerns. It cited reasons including the recent implementation of several cost-cutting initiatives, significant reductions in inventories and rental expenses, and the option of divesting its investment properties as and when required. The Group is also in the process of obtaining a waiver from the banks for the technical breach of financial covenants for some of its loan facilities, so the banks can continue extending loans to the Group. The Company’s shareholders, Tan Tock Han and Tan Kheng Kuan, have also provided a letter confirming that they are willing and able to provide continuing financial support to the Group to enable it to operate as a going concern and for it to meet its obligations for at least 18 months from 30 June 2018. For the full statement, click here.

On 10 December 2018, KTL announced that it has restructured its board of directors with effect from Dec 10, with two appointments and a resignation. For the full announcement, click here.

With a legacy of more than 100 years, KTL Global is one of the world’s largest suppliers of premium steel wire ropes, synthetic ropes and subsea rigging equipment to the offshore oil & gas, marine and construction industries. It also provides testing, certification and maintenance services to the O&G market.

MMP Diversifies into LNG via Russian JV Stake

For the three months ended 30 September 2018, MMP Resources reported a net loss attributable to owners of the company of S$458,000, down from S$585,000 in the year-ago quarter. Revenue jumped 206% YoY to S$55,000. For the full results statement, click here.

On 5 December 2018, MMP said it was acquiring a 50% stake in a joint venture company that owns an operating gas field in Russia for S$25 million, and will be deemed a “mineral, oil and gas company” post-acquisition. The joint venture company owns the Asia One gas field in Russia’s North-West region, valued at S$50 million by MMP-appointed independent valuer Gaffney, Cline & Associates. This would allow it to diversify into the natural gas and energy business, thus providing shareholders with better returns and long-term growth, it added. For the detailed announcement, click here.

MMP Resources is a construction company, focusing on acquisition and partnership opportunities predominantly within the Travel, Hospitality and Leisure industries.

This article is provided by SGX My Gateway.

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