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3 Singapore Stocks That Are Displaying Unexpected Growth

·4-min read
3 Singapore Stocks That Are Displaying Unexpected Growth

Growth can come from surprising places.

Several businesses are still forging ahead with their own strategic initiatives despite Singapore slipping back to Phase 2.

Both blue-chip companies and smaller enterprises are building the foundations for future prosperity.

It’s the right thing to do.

Astute management understands that downturns are part and parcel of the business cycle.

By taking concrete actions to fortify the business during tough times, these companies can ride the uptrend once the economy recovers.

Here’s a list of three companies that are pushing ahead despite the challenges.

Singapore Technologies Engineering Limited (SGX: S63)

Singapore Technologies Engineering, or STE, is a global technology, defence and engineering group serving customers in more than 100 countries.

The group has offices across the world and serves a variety of segments including aerospace, smart city and public security.

STE has continued to clinch new contracts worth more than S$1.5 billion in the first quarter of 2021 (1Q2021).

As a result, its order book remained robust at S$15.7 billion as of 31 March 2021.

Despite the challenging operating conditions, the engineering giant managed to maintain its full-year 2020 dividend at S$0.15.

Last month, STE’s aviation management division sealed an agreement with Temasek Holdings, Singapore’s sovereign wealth fund, to set up a 50-50 joint venture for freighter aircraft leasing.

The pandemic has pushed up demand for e-commerce, resulting in air cargo volumes expanding around the world.

This joint venture targets to purchase passenger aircraft at attractive prices and convert them into efficient freight aircraft.

It targets to have a portfolio valued at around US$600 million within five years and STE will provide maintenance, repair and overhaul (MRO) services to these aircraft.

In addition, STE will also act as the asset and lease manager to the joint venture, thus helping it to grow its aviation leasing business.

In the medium-term, the joint venture will explore unlocking the value of its capital through a possible listing of a business trust that hinges on aircraft leasing income.

Jumbo Group (SGX: 42R)

Jumbo Group is a multi-dining concept food and beverage (F&B) group that has a portfolio of seven brands.

Its flagship brand, Jumbo Seafood, is well-known for its signature chilli crab.

The group has a total of 35 F&B outlets located in 14 cities in Asia.

Jumbo’s revenue tumbled from a five-year high of S$153.7 million in fiscal 2018 (FY2018) to S$97.6 million in FY2020.

Jumbo also reported a 31.9% year on year fall in revenue for its fiscal 2021 first half (1H2021).

Despite the decline, the total number of outlets, including franchises grew from 28 to 34 over the same period.

Telecommuting and safe distancing measures had adversely impacted footfall in its restaurants.

Despite these challenges, Jumbo has pushed on to open two new outlets last month in anticipation of the recovery.

The first is a new Tsui Wah outlet located in Jem mall, marking the group’s first foray into the western part of Singapore in more than 10 years.

The other is a second Kok Kee Wanton Noodles outlet located in Marina Bay Sands.

Singapore Exchange Limited (SGX: S68)

Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.

The group owns and operates a platform for the buying and selling of securities such as shares, bonds and derivatives.

Despite the tough economic climate, SGX has posted a respectable set of results for 1H2021.

Revenue increased by 9% year on year to S$521 million while net profit rose 12% year on year to S$240 million.

The bourse operator even bumped up its quarterly dividend from S$0.075 to S$0.08.

On the business development front, SGX has partnered with DBS Group (SGX: D05), Standard Chartered Bank (LON: STAN) and Temasek Holdings to develop a carbon exchange and marketplace.

Named Climate Impact X, or CIX, it will use satellite monitoring, machine learning and blockchain technology to ensure transparency and integrity of carbon credits.

Climate change has compelled many nations to call for more action to steer our planet to a cleaner and brighter future.

This exchange will feature standardised contracts that help to facilitate the sale of large-scale, high-quality carbon credits catering to multinational corporations and institutional investors.

CIX is expected to be launched by the end of 2021 and will set a milestone in the effort to create a more sustainable future for everyone.

Who says you can’t have the best of growth and dividend investing? We found 8 SGX stocks offering a rare mix of both! If you’re looking for new stock ideas, use our FREE 8 Singapore Stocks for Your Retirement Portfolio to uncover hidden gems you may have missed in the market. Click here to download the report.

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Disclaimer: Royston Yang owns shares of Singapore Exchange Limited.

The post 3 Singapore Stocks That Are Displaying Unexpected Growth appeared first on The Smart Investor.

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