SGX Market Updates

Singapore’s Most Traded Industrial Stocks with Highest ROEs


PUBLISHED ON |

29 January 2024

  • For the first 4 weeks of 2024, Singapore's Industrial stocks booked S$103.7 million of net institutional inflow, while all other sectors booked S$229.5 million of combined net institutional outflow. Close to 3 of the Industrial Sector stocks booked net institutional inflow for every 2 stocks that booked net outflow over the period.

  • For the 12 stocks of the Industrial Sector with the highest Return-on-Equity (ROE) ratios and a minimum of S$50k in average daily turnover over the past 4 weeks, 10 of them booked net institutional inflow over the period. These 12 stocks averaged 1.8% gains over the past 4 weeks, after averaging 26% total returns in 2023.

  • Yangzijiang Shipbuilding, Jubilee Industries and Samudera Shipping Line have been the strongest performers of these 12 stocks over the past 4 weeks, averaging 11% gains, while Ley Choon saw the biggest decline of 14%, after the one-stop service provider for underground utility infrastructure construction and road works gained 147% in 2023.




For the first 4 weeks of 2024, the STI declined 2.5% with the iEdge SG Advanced Manufacturing Index declining 5.1%. Over the four weeks, the Singapore stock market booked S$125.8 million of net institutional outflow (see SGX Fund Flow Summary), while regional Industrial stocks have also generally lagged Asia Pacific markets. However in Singapore, during the four weeks, Industrials stock Yangzijiang Shipbuilding led the STI with a 12.1% gain, while the Industrial Sector also booked the highest net institutional inflow for the period at S$103.7 million (see SGX Weekly Fund Flow By Sector).

Singapore's Industrial Sector is considered a mega-sector as it comprises more than 130 stocks in businesses that can include manufacturing, machinery, construction or transportation goods or services, in addition to other fields. Narrowing the focus to those 160 stocks that have seen more than S$50,000 in Average Daily Turnover (ADT) so far this year, there are 27 stocks that represent the Industrial Sector. Among the 27 Industrials are 12 stocks with double-digit Return-on-Equity (ROE), that is a ROE at 10.0% or higher.

Return-on-Equity (ROE) is a measure of how efficiently a company has used its shareholder equity to generate profits. A higher ROE indicates the company has been more efficient in converting equity into profit.

The 12 stocks of Singapore's Industrial Sector that maintain double-digit ROE in the SGX Stock Screener and have traded a minimum of S$50,000 average daily turnover in year-to-date are tabled below.

SGX Listed Industrial Stocks
with highest ROEs &
Average Daily Turnover > S$50,000
in YTD
SGX
Code
ROE
%
Market Cap
S$m
YTD Average
Daily Turnover
S$m
YTD Total
Return
%
YTD Net
Institutional Inflow
S$m
2023 Total
Return
%
2023 Net
Institutional Inflow
S$m
Yield
%
Samudera Shipping S56 45 390 4.48 9.8 -1.8 3.2 -7.0 4.1
Jubilee Industries NHD 30 16 0.07 10.6 0.1 27.0 0.5 N/A
ST Engineering S63 22 11,830 12.11 -2.3 3.8 21.2 110.1 4.2
VICOM WJP 22 507 0.05 0.0 0.2 -22.9 0.8 4.2
Ley Choon Q0X 20 54 0.25 -14.3 0.2 147.1 1.0 N/A
BRC Asia BEC 18 505 0.08 2.8 0.3 9.4 1.4 6.1
Yangzijiang Shipbuilding BS6 18 6,597 27.56 12.1 41.2 14.0 2.6 3.3
Marco Polo Marine 5LY 15 191 0.29 0.0 1.2 24.4 -0.6 N/A
Civmec P9D 15 396 0.07 0.0 0.2 44.0 2.5 5.6
SIA C6L 13 19,869 27.40 1.8 -5.7 25.2 -60.5 6.0
Boustead F9D 11 413 0.05 0.6 0.1 11.9 -10.1 4.6
SBS Transit S61 11 836 0.11 0.4 0.6 7.9 0.0 4.0
Total 41,605 72.54 40.3 40.5
Average 1.8 26.0 4.7

Source: SGX, Refinitiv (Data as of 26 Jan 2024).



The ROEs provided on the SGX Stock Screener are based on latest available financial statements. Note that the ROEs are not forward looking and do not take into account profit guidance.

For instance Samudera Shipping (SGX:S56) Line maintains the highest ROE of 45% among the most traded stocks of the Industrial Sector, which takes into account the group's financials for the 12 months through to 30 June 2023, and does not incorporate the profit guidance statement on 30 Oct 2023:

  • The 45% ROE was based on the 2HFY22 and 1HFY23 attributable income to the owners of the Group at US$150.3 million and US$66.7 million respectively. The total of US$216.9 million was then divided by US$482.3, which was the average of equity attributable to owners of the company over the two periods (US$527.4 million at end of 1HFY23 and US$437.3 million at end of 1HFY22).

  • Samudera Shipping's announcement on 30 Oct 2023 noted "based on a preliminary assessment of the Financial Results, the group has recorded a contraction in revenue and earnings for 3QFY23 as compared to 3QFY22" adding that "this was primarily due to a decline in the general market demand which resulted in lower container volume handled and freight rates year-on-year", and that freight rate level was "likely to continue for the rest of the financial year."



Recent Performances of Industrial Stocks

As discussed above, Yangzijiang Shipbuilding (SGX:BS6) Shipbuilding has led the STI so far this year, in addition to the dozen actively traded Industrial stocks with double digit ROEs.

  • The Jiangsu-based shipbuilder, Yangzijiang Shipbuilding announced on 17 Jan, it had secured a contract to build six units of 13,000 twenty-foot equivalent unit (TEU) methanol dual-fuel containerships for Ocean Network Express Pte Ltd, scheduled to be delivered from 2027 onwards.

  • Yangzijiang Shipbuilding's Executive Chairman highlighted that the order is a testament to the shipbuilder's technological prowess in building quality and efficient ships, and its ongoing efforts in R&D have put it at the forefront of industry advancements, equipping it to capitalize on opportunities arising from the shifts in the environmental regulations.

  • At S$1.67 on 26 Jan 2024 close, Yangzijiang's share price was trading with a price-to book ratio of 1.9x, and below its Refinitiv consensus estimate target price of S$1.908. Note Refinitiv consensus estimates represents the average of individual estimates provided by analysts covering the stock and estimates typically represent an analyst's opinion of the stock performance over the next 18 months.

Meanwhile, Catalist-listed Ley Choon (SGX:Q0X) was the lowest performing stock of the 12 stocks tabled above, after ranking as the strongest performer of the 12 stocks in 2023.

  • The one-stop service provider for underground utility infrastructure construction and road works, Ley Choon's share price declined 14.3% over the first 4 weeks of 2024, after generating a 147.1% total return in 2023.

  • As Ley Choon's announced on 10 Nov 2023, its 1HFY24 (ended 30 Sep) revenue came in 2.5% higher from 1HFY23 at S$62.8 million, its highest in 10 years. This was noted to be consistent with the overall expansions in both public and private sector construction output in Singapore and gross profit increased by 20.8% year-on-year, while its gross profit margin expanded by 2.4 percentage points for 1HFY24.

  • As of 30 Sep 2023, the Group has an unfulfilled order book of S$265.2 million. At around 2.1 times its trailing 12-month revenue, the order book will provide earnings visibility to Ley Choon Group Holdings for the next 24 to 36 months.

  • The Executive Chairman and CEO of Ley Choon Group, Toh Choo Huat, also added that over the past 6 years, the group has been extremely disciplined and consistent in executing its debt restructuring plan. Mr Toh added that once the group completes this journey, it will have more options to tap into different capital facilities for both fixed capital and working capital expansions.






This article is provided by SGX My Gateway.



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