For the first four 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, 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.
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. 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 ADT this year are tabled below.
Industrial Stocks with highest ROEs and minimum of S$50,000 ADT in YTD |
Code |
ROE % |
Mkt Cap S$M |
YTD ADT S$M |
YTD TR % |
YTD NIF S$M |
2023 TR % |
2023 NIF S$M |
Yield % |
SAMUDERA SHIPPING LINE |
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 |
SINGAPORE TECH 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 GROUP |
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 SHIPBLDG |
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 |
SINGAPORE AIRLINES |
C6L |
13 |
19,869 |
27.40 |
1.8 |
-5.7 |
25.2 |
-60.5 |
6.0 |
BOUSTEAD SINGAPORE |
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 |
ROEs Available on Stock Screener
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 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:
Recent Performances
As discussed above, Yangzijiang Shipbuilding has led the STI so far this year, in addition to the dozen actively traded Industrial stocks with double digit ROEs. On 17 Jan, the Jiangsu-based shipbuilder announced 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 Shipbuilding 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 Group Holdings 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 declined 14.3% over the first four weeks of 2024, after generating a 147.1% total return in 2023.
As reported back on 10 Nov, 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.
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