Singapore’s 5 most traded technology stocks – AEM, Venture Corp, UMS, ISDN and Nanofilm Technologies have averaged 16% gains in the 2020 year-to-date, bringing their 12-month average total return to 87%, with the median total return at 83%. The 5 stocks have all ranked as top 50 stocks by turnover in the 2021 year-to-date.
All 5 technology stocks reported their FY20 (ended 31 Dec) results in recent weeks. For FY20 net profit vs FY19, AEM reported 85% growth, Nanofilm Technologies reported 68% growth, ISDN reported 59% growth, and UMS reported 9% growth, while Venture Corp reported an 18% decline (with 4QFY20 net profit up 8% q-o-q).
Sector drivers identified across the FY21 outlooks of the 5 technology stocks included increased demand for industrial automation, accelerating chip sales and increased competition, while in multiple instances, diversification strategies and value chain management remain corporate objectives.
Singapore is a hub for innovation. The past 10 years saw Singapore take the lead across ASEAN in Patent Cooperation Treaty publications, with WIPO statistics showing most of Singapore’s publication were made in the fields of computer technology, digital communication, audio-visual technology, electrical machinery, apparatus and energy, and medical technology.
The increased fields of application of technology has also been a key driver of the stocks of the Technology Sector. Last night, the SIPMM Electronics Sector PMI was reported to remain in expansion mode, at 50.8, now down 0.4 points from the 27 month high of 51.2 formed in December 2020, propelled by demand for technology products and services.
Singapore’s 5 most traded Technology stocks over the first 9 weeks of 2021 have been AEM Holdings, Venture Corporation, UMS Holdings, ISDN Holdings and Nanofilm Technologies International. Together the 5 stocks have seen close to S$70 million a day in combined daily trading turnover while averaging 16% price gains. This brings their average 12 month total returns to 87%. The past performance of the 5 stocks outpaced the top quartile of global technology stocks by market value which have generated a 4% median return in the 2021 year-to-date, bringing their average 12 month return to 33%.
| Stock | SGX Code |
Market Cap S$m |
YTD Net Institutional Inflow S$M |
YTD Price Change % |
12-Month Total Return % |
10-Year Total Return % |
P/E |
|---|---|---|---|---|---|---|---|
| AEM | AWX | 1093 | 2.7 | 15 | 83 | 7335 | 11 |
| Venture Corp | V03 | 5553 | -41.8 | -1 | 19 | 246 | 19 |
| UMS | 558 | 597 | 27.6 | 4 | 25 | 641 | 16 |
| ISDN | I07 | 266 | -0.6 | 51 | 212 | 401 | 23 |
| Nanofilm Tecnologies | MZH | 3329 | -11.1 | 15 | 95* | 95* | N/A |
| Average | 16 | 87 |
Source: Reuters, Bloomberg, SGX StockFacts (Data as of 2 March 2021)
* returns from IPO price.
Recent weeks has seen the 5 stock all report their FY20 (ended 31 Dec) financial results:
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AEM Holdings (SGX:AWX) reported record revenue and profit for FY220 with profit before tax increasing 79% year-on-year to S$113.8 million (click here for more).
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Venture Corporation (SGX:V03)'s FY20 net profit of S$297.3 million on revenue of S$3,012.9 million, with net margin of 9.9% (click here for more).
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UMS Holdings (SGX:558) reported S$36.5 million in FY20 net profit attributable to shareholders on record revenue of S$164.4 million (click here for more).
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ISDN Holdings (SGX:I07) reported FY20 net profit increased 59% year-on-year, to S$22.5 million, with total revenue up 24% (click here for more).
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Nanofilm Technologies International (SGX:MZH) achieved a record financial performance for FY20 with net profit up 68.1% year-on-year (click here for more).
Both AEM Holdings and UMS Holdings cited World Semiconductor Trade Statistics estimations of the annual global sales of semiconductors expected to increase by 8.4% in 2021, highlighting an upward revision from 6.2% as expected previously. AEM Holdings added that the pandemic accelerated digitalisation and has made work from home the new normal, significantly boosting the Integrated Circuit market which is expected to grow by 11% in 2021 on the back of continuing economic recovery, 5G proliferation and cloud expansion. UMS Holdings also cited a DIGITIMES article stating global chip demand for automotive electronics has been gaining momentum since 4QFY20 and will continue to serve as a key growth driver as demand exceeds supply.
Venture Corporation noted it has made good headway in the Life Science Technologies, Medical Devices/Equipment and Lifestyle and Wellness Consumer Products domains with the wide-ranging advances and growing applications of Photonics, Networking and Communications and Advanced Semiconductor-related Equipment domains is expected to drive our growth in these segments.
ISDN Holdings meanwhile cited a Mordor Intelligence article estimating that the China Factory Automation and Industrial Controls Market is forecasted to grow at a compound annual growth rate of 9.8% to 2025. At the same time, China’s motion control market is also expected to grow at a steady pace between 2021 and 2026 alongside increased demand for machine tools, robotics, and semiconductors with the support from strategies like “Made in China 2025” (click here for more).
Last year’s unicorn debutant, Nanofilm Technologies International noted it is well-positioned for growth opportunities in existing and recently established end industries, underpinned by its deep-tech environmentally sustainable nanotechnology solutions as key catalysts in enabling its customers to achieve high value-add advancements in their end-products. The Group added that for long term strategic objectives, it continues to maximise its core technologies in mission critical applications in new end-markets of favourable secular growth trends, in line with its vision of integrating nanotechnology into the daily lives of end-consumers.
