SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<ul><li>Share buybacks by primary listed companies 3 Mar - 9 Mar 2023 Meanwhile, Genting Singapore, Sembcorp Industries, Jardine Matheson, Singapore Airlines, Yangzijiang Shipbuilding (Holdings) led the net institutional inflow for the five sessions.</li><li>There were 19 primary-listed companies conducting share buybacks over the five trading sessions through to Mar 9, with a total consideration of S$10.6 million.</li></ul>

Share buybacks by primary listed companies 3 Mar - 9 Mar 2023 Meanwhile, Genting Singapore, Sembcorp Industries, Jardine Matheson, Singapore Airlines, Yangzijiang Shipbuilding (Holdings) led the net institutional inflow for the five sessions.There were 19 primary-listed companies conducting share buybacks over the five trading sessions through to Mar 9, with a total consideration of S$10.6 million.

Buybacks, director transactions resume at a lively pace

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> reported record revenues and profits for FY22. Guidance for FY23 was underwhelming and margin pressure was much larger than feared</li>
<li>On an 18-24 month horizon, we think AEM outperforms but in the short-term stock could see more downside as worries about margin pressure persist</li>
<li>Lower Fair Value estimate to 6 SGD from 8 SGD (15x 0.40 EPS FY24).</li>
</ul>



AEM (AEM SP) reported record revenues and profits for FY22. Guidance for FY23 was underwhelming and margin pressure was much larger than feared
On an 18-24 month horizon, we think AEM outperforms but in the short-term stock could see more downside as worries about margin pressure persist
Lower Fair Value estimate to 6 SGD from 8 SGD (15x 0.40 EPS FY24).


AEM: 2023 Is a Transition Year, Back to 0.40 EPS in 2024

<ul><li>Venture, UMS & Frencken have ranked as Singapore’s most traded Technology stocks over the past four weeks, with the trio averaging 14% gains, while booking S$48 million of net fund inflows.</li><li>This follows average declines of 24% in total return in 2022 on S$139 million of net fund outflows.</li><li>These 14 stocks have averaged 10% gains over the past four weeks, while booking S$42 million of net fund inflows, outpacing the STI, and contrary to the broader Singapore stock market which has booked net fund outflows.</li></ul>

Venture, UMS & Frencken have ranked as Singapore’s most traded Technology stocks over the past four weeks, with the trio averaging 14% gains, while booking S$48 million of net fund inflows.This follows average declines of 24% in total return in 2022 on S$139 million of net fund outflows.These 14 stocks have averaged 10% gains over the past four weeks, while booking S$42 million of net fund inflows, outpacing the STI, and contrary to the broader Singapore stock market which has booked net fund outflows.

Technology Sector Led Global Stocks in January

Thematic (Sector/Industry)

<ul>
<li>The 2022 vintage of "5 High Conviction Ideas" had the weakest performance since 2017, with only China Shineway posting a positive return</li>
<li>Olam, Rex and Starhub all declined approximately 16% in FY22</li>
<li>Our 2023 vintage will hopefully perform better with 4 out of 5 favorites in the commodity space</li>
</ul>


The 2022 vintage of "5 High Conviction Ideas" had the weakest performance since 2017, with only China Shineway posting a positive return
Olam, Rex and Starhub all declined approximately 16% in FY22
Our 2023 vintage will hopefully perform better with 4 out of 5 favorites in the commodity space


Overview of My Winners and Losers in 2022...And 5 High Conviction Ideas Going into 2023

<ul>
<li>AEM reported its best PBT 3Q and 9M22 results ever, yet investors remain skeptical of its FY23 outlook</li>
<li>Management reiterated guidance and provided a bullish statement about the coming years</li>
<li>AEM EPS likely to reach at least 0.42 SGD leaving the stock trading at only 7.8x P/E FY22 </li>
</ul>


AEM reported its best PBT 3Q and 9M22 results ever, yet investors remain skeptical of its FY23 outlook
Management reiterated guidance and provided a bullish statement about the coming years
AEM EPS likely to reach at least 0.42 SGD leaving the stock trading at only 7.8x P/E FY22 


AEM: Another Solid Earnings Report, but Mr. Market Remains Worried on Outlook

Singapore

UMS Holdings Limited provides equipment manufacturing and engineering services to Original Equipment Manufacturers (OEMs) of semiconductors and related products. The Company manufactures high precision components and complex electromechanical assembly and final testing services. UMS supports the electronic, machine tools and oil and gas industries.

Micro-Mechanics Holdings Limited designs and manufactures precision tools.  The Company also provides effective solutions and total support services to its customers.

Global Testing Corporation Ltd. offers testing services for the semiconductor manufacturing industry.  The Company offers wafer sorting and final testing services for logic and mixed signal semiconductors used in consumer electronics and communications devices.

Ellipsiz Ltd. offers products and services to the semiconductor industry. The Company manufactures probe cards used to test semiconductor wafers, and provides wafer reclaim services, equipment distribution and support services for the semiconductor and electronics manufacturing services (EMS) industries.

Sunright Limited provides management services and research and development in burn-in and test-related activities. The Company also manufactures burn-in equipment and substrates, assembles electronic, and electrical components, as well as provides semiconductor testing services.  In addition, Sunright trades and distributes high-technology electronic products.

Advanced Systems Automation Limited designs and manufactures automatic molding machines and other back-end assembly equipment for the semiconductor industry. The Company also manufactures precision tools, dies, and encapsulation molds, and provides wafer bumping services and packaging technology consulting.

Asia Vets Holdings Ltd. assembles integrated circuits.  The Company assembles and tests smart card modules, and loads onto them customer specific data or software.  Smartflex produces smart cards for the telecommunications, banking, financial services, and pay television industries.

Manufacturing Integration Technology Limited designs, develops, manufactures, and distributes automated equipment for the semiconductor industry.  The Company also designs and manufactures vision inspection system and precision engineering.

Manufacturing Integration Technology (MIT SP)

IGG Inc. is an online games developer and operator. The Company offers multi-language browser games, client-based games and mobile games to players globally.

Motech Industries Inc. manufactures and markets solar cells as well as testing and measuring instruments.

Winstek Semiconductor Co Ltd provides wafer and IC (Integrated Circuit) testing services for mixed signal, digital, optical, and radio frequency (RF) devices.

Land Mark Optoelectronics Corporation is a supplier in GaAs and InP based epitaxial wafers for optical communication, industrial application, and special-purpose usage. The Company specializes in using the MOVPE (or MOCVD) reactors for epitaxial growth of compound semiconductor material.

Zhejiang Sunflower Light Energy Science & Technology LLC develops, produces and sells photovoltaic products. The Company manufactures crystalline silicon photovoltaic solar cells, wafers, modules and other related solar energy parts.

E&R Engineering Corporation designs and manufactures machines and packing materials for semiconductors, SMT, IC substrate, LED and passive components. The Company's machines consist of automation equipment, UV lasers, dispensers, printers and plasma chambers. E&R also offers carrier tape and plastic reels.

Gigasolar Materials Corp. manufactures solar conductive paste to provide solar energy.

Genetech Technology Berhad designs and develops both customized and standardized industrial automated equipments for high technology related manufacturing companies. The Company also provides integrated engineering solutions that incorporates mechanical, engineering and software functions.

EGing Photovoltaic Technology Company Ltd. manufactures solar energy equipment. The Company produces mono crystalline and polycrystalline solar modules.  EGing sells its products in Germany, Spain, Italy, the Czech Republic, Australia, South Korea and South Africa.

Seoul Semiconductor Co., Ltd. manufactures parts for electronic products.  The Company's products include light emitting diode (LED) custom display, LED dot matrix, LED back light, photo diode, photo transistor, LED IR lamp, LED display with controller, and LED array.

Holtek Semiconductor Inc. develops and manufactures integrated circuit (IC) products. The Company's products include microcontrollers, and other peripheral devices in the communication, remote control, computer peripheral, and memory industries.

AEM Holdings Limited designs and manufactures semiconductor manufacturing equipment and related tooling parts and precision machining of components for semiconductor industry.  The Company also manufactures and distributes electronics, engineering, chemical and related products. AEM provides engineering services.

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AEM (AEM SP)

Buybacks, director transactions resume at a lively pace

Share buybacks by primary listed companies 3 Mar - 9 Mar 2023 Meanwhile, Genting Singapore, Sembcorp Industries, Jardine Matheson, Singapore...

Singapore Exchange Ltd (SGX)

AEM: 2023 Is a Transition Year, Back to 0.40 EPS in 2024

AEM reported record revenues and profits in FY22. The outlook for FY23 is weak as management thinks of it as a transition year.

Nicolas Van Broekhoven

Technology Sector Led Global Stocks in January

Venture, UMS & Frencken have ranked as Singapore’s most traded Technology stocks over the past four weeks, with the trio averaging 14% gains,...

Singapore Exchange Ltd (SGX)

Overview of My Winners and Losers in 2022...And 5 High Conviction Ideas Going into 2023

Our FY22 vintage of High Conviction Ideas had its weakest performance since FY17. We hope for better returns for our commodity-focused FY23 selection.

Nicolas Van Broekhoven

AEM: Another Solid Earnings Report, but Mr. Market Remains Worried on Outlook

AEM reported solid results over the first 9 months. None of this seems to matter as the market has sold off the entire tech sector and investors do...

Nicolas Van Broekhoven

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