Wilmar, Japfa and Golden-Agri have led Singapore’s 10 most traded Agriculture, Food and Beverage stocks for the first eight sessions of 2020. The 10 stocks averaged 13% total returns in 2019, with their median return at 17% outpacing regional and global peers.
Sheng Siong Group, Koufu Group, SATS and First Resources all report at least four-fifths of their revenue to Singapore. The four stocks saw S$88 million in net institutional inflow in 2019, with average/median total returns of 22%/23%.
Of the four stocks, Koufu Group generated the strongest total return in 2019 (+29%), was third strongest of the 10, while achieving 25% YoY growth in 9MFY19 NPAT. Proportionate to market value, Koufu also saw the highest net institutional inflow (5%) of the 10 stocks.
The IMF is expected to confirm on 20 January that the growth rate of Global GDP slowed to a 10 year low in 2019. Hence, it may be of little surprise that global Agriculture, Food and Beverage (“F&B”) stocks, that are largely consumption-dependent, generated marginal declines last year with a 1% median decline in total return.
Almost half of the Global Agriculture, F&B stocks are listed across Asia Pacific exchanges, with the significant regional proportion also generating a 1% median decline in total return.
In Singapore, the relevant contingent of close to 40 Agriculture, F&B stocks generated a 3% median total return in 2019. At the same time, valuations of the Singapore stocks are highly competitive with a 22x median P/E ratio, similar to the 19x median P/E ratio for the close to 1800 relevant stocks across Asia Pacific.
Singapore’s 10 most traded stocks with significant Agriculture, F&B businesses currently maintain a median P/E of 23x. The 10 stocks generated a median total return of 17% in 2019. By comparison the median total return of the top quartile of Agriculture, F&B stocks listed both globally, and Asia Pacific was 12%.
Total returns for the 10 most traded Agriculture, F&B stocks in 2019 ranged from -36% for Dairy Farm International to +46% for Thai Beverage. 7 of the 10 stocks generated positive returns for 2019. The individual performances of the 10 stocks, which contributed S$63 million a day to 2019 trading turnover are sort by the most traded stock in 2019, in the table below.
| Name | SGX Code |
Mkt Cap (S$M) |
2019 Volatility |
2019 Price Change |
2019 Total Return |
2020 YTD Price Return |
2019 Average Daily Turnover (S$M) |
2019 Net Insti Flow (S$M) |
|---|---|---|---|---|---|---|---|---|
| WILMAR INTERNATIONAL | F34 | 27,587 | 19% | 32% | 36% | 6% | 20.0 | 241 |
| THAI BEVERAGE PCL | Y92 | 22,351 | 29% | 46% | 49% | 0% | 14.9 | 187 |
| SATS | S58 | 5,692 | 16% | 9% | 13% | 1% | 8.7 | 33 |
| GOLDEN AGRI-RESOURCES | E5H | 3,056 | 45% | -4% | -2% | 2% | 6.7 | -8 |
| DAIRY FARM INTL HLDGS | D01 | 10,365 | 26% | -38% | -36% | 0% | 6.6 | -40 |
| FIRST RESOURCES | EB5 | 2,978 | 26% | 23% | 25% | -1% | 1.7 | 13 |
| SHENG SIONG GROUP | OV8 | 1,894 | 15% | 17% | 21% | 2% | 1.6 | 21 |
| JAPFA | UD2 | 1,109 | 37% | -21% | -18% | 4% | 1.4 | -18 |
| OLAM INTERNATIONAL | O32 | 5,831 | 22% | 10% | 14% | 1% | 1.0 | 14 |
| KOUFU GROUP | VL6 | 430 | 22% | 25% | 29% | 1% | 0.8 | 20 |
| Average | 26% | 10% | 13% | 1% | ||||
| Median | 24% | 13% | 17% | 1% |
Source: SGX Stockfacts, Thomson Reuters, Bloomberg (Data as of 13 January 2020)
By comparison, Singapore’s 10 most traded stocks in 2019 with an energy focus generated a median 23% total return for the year, on a much higher median volatility of 41%. See market update: 23% Median Gains for SGX Most Active Energy-Linked Stocks in 2019.
Likewise the 10 most traded manufacturing stocks which included F&B manufacturers Wilmar International and Thai Beverage also generated a higher median return of 34%, on higher volatility of 32%. See recent market update: SGX's Big Manufacturing Stocks that Beat the PMIs in 2019.
Singapore Focused Agriculture, Food and Beverage Stocks Averaged 22% Total Returns in 2019
Back on 21 November, the Ministry Of Trade and Industry reported that Growth in Singapore’s accommodation & food services sector accelerated in 3Q19 from both 2Q19 and 3Q18. Food services expansion was attributed to higher sales volumes at fast food outlets, restaurants and other eating places. Click here for more.
The 4 of the 10 most traded Agriculture, F&B stocks that reported at least four-fifths of their revenue to Singapore in their last financial year, all generated gains in 2019 with a median total return of 23% and average return of 22%, underpinning the consistency of their returns in 2019. All 4 stocks were recipient to net institutional inflow for the year, which totalled S$88.2 million.
Koufu Group NPAT +25% in 9MFY19
Of the 4 stocks, Koufu Group generated the strongest total return in 2019, while also achieving 25% YoY growth in 9MFY19 (ended 30 Sep) net profit after tax.
Koufu Group was also the third strongest performer of the 10 stocks in 2019, after Thai Beverage and Wilmar International. Proportionate to market capitalisation as of the end of 2019, Koufu Group saw the highest net institutional inflow of all 10 stocks in 2019, at 4.7%. Sheng Siong Group and Wilmar International saw the next highest net institutional inflow proportionate to year-end market capitalisation at 1.1% and 0.9% respectively.
Koufu Group Executive Chairman and CEO Pang Lim reported in November that (click here for more) that Koufu Group had:
-
Continued to step up the expansion of its F&B network across its chain of food courts, coffee shops, F&B concept stores and restaurant business segments. This has been with a view to expand its market share and bring new food varieties to consumers.
-
Made good strides in its organic expansion, increasing its network of food courts and coffee shops to 65 outlets across both segments. This is expected to increase further as the Group continues to seek and secure new strategic locations, with a focus on hospitals, commercial malls, educational institutions and new housing estates.
-
Seen its high-growth tea beverage brands, R&B Tea and Supertea, surpass the expected 25 outlets to hit a new target of 29 by end-2019. After opening five new R&B Tea outlets in 3QFY19, it had secured another 10 new locations which were slated to open progressively from 4Q19 to FY20.
Koufu Group is expected to report FY19 results in the last week of February.
