Southeast Asia’s First-Ever Fortune 500 Ranking: 3 Companies You Should Keep Your Eye On
The Fortune Global 500 is an annual list of 500 global companies that generated the highest revenue for the most recent fiscal year.
Compiled by Fortune, an American business magazine company, with nearly 30 million active users, the rankings serve as a testament to a business’s size and clout.
Recently, the media juggernaut announced its first-ever Southeast Asia’s Fortune 500 list.
In this list, 84 companies headquartered in Singapore were featured.
Indonesia led the region with 110 companies, while Thailand was not far behind with 107 companies.
To be featured on the list, a company must have generated at least US$460.8 million in annual revenue for fiscal year 2023 (FY2023).
Let’s explore several of the biggest 500 companies on this list that you may wish to add to your buy watchlist.
Sea Limited (NYSE: SE)
Sea Limited (Sea) is a gaming and e-commerce company founded in Singapore and is ranked 20th on the list.
Despite being a relatively recent establishment started in 2009, SEA has grown tremendously, now boasting a market capitalisation of US$40.9 billion.
This positions Sea as the fourth-largest company in Singapore, trailing only behind the three major banks, DBS Group (SGX: D05), United Overseas Bank (SGX: U11), and OCBC Bank (SGX: O39).
As an internet business, Sea involves itself in many aspects of the online ecosystem.
The three biggest brands under Sea are Garena, Shopee, and SeaMoney.
Garena, Sea’s online entertainment arm, owns and develops some of Southeast Asia’s (SEA) most popular games such as Call of Duty Mobile and Free Fire.
Shopee is Singapore’s most popular e-commerce platform.
The platform is enjoyed by tens of millions of customers predominantly in SEA.
Lastly, SeaMoney, Sea’s financial services division, coordinates digital payments and offers financial services across SEA.
For the first quarter of 2024 (1Q 2024), Sea was off to a strong start, with all three divisions recording double-digit year-on-year revenue growth.
Overall net revenue surged by 22.8% year on year, reaching US$3.7 billion.
However, the technology conglomerate recorded a net loss of US$23.0 million, a reversal from the prior year’s net profit of US$87.3 million.
This loss was largely attributed to a surge in marketing costs for its e-commerce business.
Sales and marketing expenditure doubled from US$338.2 million to US$675.9 million year on year.
With the emergence of other e-commerce platforms in SEA, such as Temu and Tiktok Shop, Sea’s increased marketing expenditure is seen as a painful yet necessary expense.
In Sea’s gaming department, Garena, Free Fire has been a huge success this quarter, following significant updates to the game.
Free Fire became the world’s most downloaded mobile game in 1Q 2024.
Apart from attracting new players, existing players are continuously engaged, with monthly active users (MAU) increasing by 24% year on year to 594.7 million.
City Developments Limited (SGX: C09)
City Developments Limited (CDL) is a real estate developer with over 60 years of experience.
It is ranked 101 on the Fortune 500 list.
CDL owns properties across three different sectors: residential, commercial, and hospitality located in various countries.
Under its hospitality wing, CDL owns Millennium & Copthorne Hotels Limited, a global brand with hotels located across various continents
For 1Q 2024, the blue-chip group posted a total sales revenue of S$736.8 million for its Singapore property development arm, an eye-catching 245.6% year on year increase.
The remarkable growth in sales was led by successful launches of various residential properties such as the Lumina Grand in Bukit Batok and The Myst in Bukit Timah.
Overseas residential properties continued to perform well, with properties in China and Australia seeing healthy sales momentum.
CDL’s Singapore commercial property portfolio remains robust, with its office and retail occupancy rate at 97.7%, higher than its national average of 93.3%.
For CDL’s hotel business, growth was seen across all three operating metrics.
For the quarter, the group saw its total occupancy rate rise from 67.0% to 70.1%, an increase of 3.1 percentage points year on year, with hotels in Singapore and Australia leading the charge.
Average room rate (ARR) improved slightly by 0.7% year on year, reaching S$198.9.
Revenue per available room (RevPAR) picked up more significantly at 5.3% year on year, standing at S$139.4.
For the next quarter, CDL plans to launch two new residential projects in the second half of 2024 in Singapore.
The first is Union Square Residences, a 366-unit residential project located at the former site of Central Mall in Clarke Quay.
The second upcoming project is located in Woodlands, a 348-unit residential project within a minute’s walk from the Woodlands South MRT station.
Starhub (SGX: CC3)
Starhub is one of Singapore’s leading telecommunications providers, connecting households and people.
Beyond its telecommunications business, Starhub collaborates with corporations and governments to develop solutions for advanced technologies and applications.
For example, in the cybersecurity arena, Starhub and Temasek Holdings have joined forces to create Ensign, delivering cybersecurity solutions to domestic and international clients.
Starhub holds a respectable 184th position on the Fortune 500 list.
For 1Q 2024, the telecommunications provider delivered a solid set of earnings.
Net revenue dipped slightly by 0.1% year on year, from S$546.0 million to S$545.4 million.
However, Starhub’s net profit came in at S$40.1 million for the quarter, up 8.1% year on year.
Starhub was also able to generate a positive free cash flow this quarter of S$86.6 million.
This is a huge improvement compared to the previous year’s negative free cash flow of S$19 million.
Notably, Starhub’s enterprise businesses scored a commendable 10.4% year on year revenue growth.
This success is particularly significant given the tight competition in Singapore’s mobile and broadband sectors.
Cybersecurity has proven to be a successful venture for Starhub, with the division’s revenue growing by 37.1% year on year to S$73.1 million.
Looking ahead, the company is set to launch “Cloud Infinity” later this year, a rapid multi-cloud data infrastructure aimed at businesses.
This is a promising launch from Starhub, aligning with Singapore’s push towards smart cities and applications.
Investors will be pleased that Starhub is staying focused on its goals outlined during the company’s most recent Investor Day last year.
During Investor Day 2023, the telco company introduced Cloud Infinity while also seeking to expand its enterprise business.
Apart from these two initiatives, Starhub’s management team highlighted two more goals.
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Disclosure: Aw Kai Rui does not own any of the stocks mentioned in this article.
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