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.

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/101/421/original/SunpowerSGX.png?1570598879" class="editor-image img-responsive" data-smartkarma-image-id="101421"></figure>
<div class="content-caption">Sunpower</div>
Engineer Frank Ma strives to live a life in 3D - the three Ds of diligence, determination and discipline, that is.&nbsp; For the Co-Founder and Executive Director of SGX-listed environmental protection solutions provider Sunpower Group Ltd, these defining qualities are touchstones. "Throughout my life, I've always set targets, and worked hard to achieve those goals," said the graduate of Nanjing Chemical Engineering Senior College, who also holds a Master's degree in Engineering Management from the University of Shanghai for Science and Technology. Ma's tenacious spirit was never more obvious than when he taught himself to speak English more than three decades ago. "During my university days, my English was really bad. After graduation, I decided to do something about it," he recalled. Having no teacher, and armed only with a dictionary and a voice recorder, Ma began memorising and reciting 20 English words every day for a year to build up his vocabulary. Today, his command of and fluency in the language belies that self-taught journey. To be sure, Ma's focus and perseverance have stood him in good stead in growing Sunpower, which he founded in 1997 together with his university classmate, Executive Chairman and Chief Executive Officer Guo Hongxin. In the late 90s, China began developing its petrochemical industry through oil and gas enterprises like China Petroleum &amp; Chemical Corporation, or Sinopec. But the need to import equipment - which resulted in long delivery lead times and escalating costs - was a serious bugbear. "We were able to fill the gap in the market by supplying Sinopec with equipment, like pipe supports, that were made with local technology and know-how. This helped them save time and money," he said. That was the milestone that marked the establishment of Sunpower's foundation business - Manufacturing &amp; Services (M&amp;S). This segment makes customised energy-saving and environmental protection products with proprietary heat transfer technologies for diverse industries, ranging from chemicals and petrochemicals to pharmaceuticals and metallurgy.&nbsp; Sunpower has served over 1,500 customers, including top-notch global corporations in more than 30 countries to-date, and about 70% are repeat clients.&nbsp; From its initial business of pipe supports, the Group went on to develop high-efficiency heat exchangers and pressure vessels, as well as heat pipes and heat pipe exchangers for recovery of waste heat in petchem, steel and chemical projects. Much later, it developed proprietary flare and flare gas recovery systems, used to recover petchem by-products from flare gas generated in a refinery during production.
&nbsp;
China's Smog Woes But the petrochemical sector has its downsides, including capacity limitations and a cyclical nature. "We realised we needed to diversify, and expand our technology to other sectors such as pollution control," Ma noted. China has increasingly suffered the scourge of polluted air since the country began industrialising, with inefficient, coal-fired boilers in industrial parks identified as one of the biggest culprits contributing to the heavy smog that regularly blankets its skies.&nbsp; The window of opportunity for Sunpower to break into this market finally widened in 2015, when the Chinese government stepped up efforts to impose stringent environmental protection laws - including compulsory shuttering of small boilers and promotion of clean coal combustion - to improve the nation's air quality. In 2016, Sunpower repositioned itself as an environmental protection services provider through its Green Investments (GI) business. The unit invests in, develops and operates centralised plants to supply steam, heat and electricity on an exclusive basis in industrial parks, replacing existing, inefficient coal-fired plants.&nbsp; While its technology cuts the amount of coal used in power generation, it also supplements with alternative feedstock, such as sludge. Using its proprietary energy-saving and long-distance steam distribution pipeline technologies, energy- and time-efficient delivery to customers is ensured. Sunpower is building a sizeable portfolio of such GI projects to generate long-term, recurring and high-quality cashflows, based on typically 30-year concession agreements. This unit - the Group's value creator and growth driver - boasts a fully integrated business model, backed by its own design institute, in-house manufacturing and services solutions, as well as proprietary technologies. With more than 400 researchers and design engineers, the Group owns 154 patents, including 60 invention patents. It has also taken the lead, or has participated, in the drafting of five engineering-related national standards that have become benchmarks for the rest of the industry.&nbsp; The long-term growth potential of its GI business is secured by a robust pipeline of projects in different stages of evaluation, with total value pegged at more than RMB3.2 billion. As at August 2019, eight projects are in operation, while another five are either under construction or in the design phase.&nbsp; Although the GI unit is in early stages of development and still ramping up, it has already contributed significantly to the Group's underlying operating cashflow for the first half of 2019, which has more than doubled year-over-year. GI revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) in 1H 2019 also roughly tripled from the previous year, accounting for more than 36% and 65% of group revenue and EBITDA respectively.&nbsp; For Ma, the GI unit is akin to an expressway toll booth. "Steam is a non-discretionary input for our clients, and we're exclusive suppliers for the industrial parks we operate in. That gives us captive customers and the ability to obtain advance payments from them," he said. "In that sense, we're like toll-keepers, collecting cash regularly." This first-mover advantage, combined with its technological expertise and strong track record, gives Sunpower a significant competitive edge, he noted. "Our stable and growing M&amp;S business complements our GI unit by efficiently controlling the cost of construction and eliminating project delays. This combination provides synergies that sets Sunpower apart from less-integrated firms."
&nbsp;
Targeting Clear Skies In 2019, the Group was recognised as one of the Best Managed Companies in China by Deloitte Touche Tohmatsu, the largest of the "Big Four" accounting and audit firms, in the first year the award was introduced to the country.&nbsp; Listed on Singapore Exchange since 2005, Sunpower has a current market capitalisation of about S$365 million. In the 2019 year-to-date, the stock has generated a total return of 39.1%, outperforming total returns of 6.5% and 8.2% for the benchmark Straits Times Index (STI) and broader FTSE ST All-Share Index respectively. Looking ahead, prospects are bright, with environmental protection and pollution control continuing to play increasingly pivotal roles in China's national policies. "There's still much to be done to meet the central government's pollution reduction targets, and this offers enormous opportunity for us," Ma added. A case in point is the Ministry of Ecology and Environment's crackdown on Shandong provincial officials for missing air quality targets earlier this year.&nbsp;"Such stringent enforcement by top-level officials will drive the long-term prospects of China's environmental protection industry, in particular, the anti-smog services sector that our GI unit is targeting." To boost its GI operations, Sunpower plans to invest RMB2.5 billion of equity in green assets by 2021, compared to its equity investment and commitment of RMB1.6 billion as at mid-2019.&nbsp; In terms of capacity, which includes plants under construction, the Group aims to grow its current gross annualised steam capacity of 21.5 million tons to 30 million tons, and current gross annualised electricity generation capacity of 2.1 million megawatt hours to 3.5 million megawatt hours.&nbsp; This expansion will be funded internally and via capital from its convertible bond tranches. In 2017 and 2018, two strategic private equity investors - DCP Capital Partners and CDH China Management - invested in Sunpower by subscribing for its convertible bonds.&nbsp; The Group's mergers and acquisitions (M&amp;A) strategy targets projects that serve a diversified customer base in stable, domestic-oriented, and cashflow-generative industries, such as textiles, printing and dyeing, food and beverage.&nbsp; "We're also interested in brownfield projects that can contribute immediately to revenue and earnings, and where we can use our technology to further improve the acquired company's operating and financial performance," Ma noted.
&nbsp;
Promising Potential Currently, the Group remains focused on GI prospects within China. "The market potential is huge, and that's our priority," he said.&nbsp;"The challenge is choosing the right target that will guarantee success according to our financial objectives, and that's where careful analysis and due diligence come in." A self-confessed "control freak", Ma is all about drilling down into the specifics. "I'm a very detailed person, and I always try to prepare, forecast and plan as much as I can," he said with a grin. In this regard, managing a business will always be his first love. "My passion lies in industry - developing strategy, overcoming challenges, driving innovation, and turning that innovation into sustainable cashflows and profits." His fervour for enterprise has its roots in China's industrialisation and urbanisation drive, which kicked off as early as the 1930s - a period in the country's history marred by civil war and political strife. "Back then, many enterprise owners believed manufacturing would form a base for the nation's development, and the setting up of industries would build the fundamentals of our economy, and thereby save our country," Ma said. That belief has also laid the foundation for China's speedy transformation into an industrial powerhouse during the turn of the century.&nbsp;"That's why I have chosen to stay in industry, even though there have been opportunities to break away and do something different," he added. When the 53-year-old is not planning and strategising for the future, he's enjoying the outdoors. "I love nature, and enjoy climbing mountains all over the country. That's why I'm passionate about this business - I want to give China back her blue skies," he added. The wine aficionado also believes in working hard and keeping things simple, a mantra he often shares with his son, 25.&nbsp; "You need to add value to yourself and contribute to society. At the same time, it's important to strike a good work-life balance. After all, life is meant to be enjoyed," he smiled. "And just like good wine, life is beautiful, deep, and full of complexity. Both should be savoured to the last drop."
&nbsp;
Sunpower Group Ltd
Founded in 1997, Sunpower&nbsp;is a China-based environmental protection solutions company specialising in proprietary energy-saving and clean power technologies, with a strong focus on anti-pollution investment projects. The Group operates two segments - Manufacturing &amp; Services (M&amp;S)&nbsp; and Green Investments (GI). The first segment develops customised energy-saving and environmental protection products with proprietary heat transfer technologies for diverse industries. The second segment - GI - focuses on the investment, development and operation of centralised heat, steam and electricity generation plants that replace existing, inefficient coal-fired plants in industrial parks. The Group is building a sizeable portfolio of GI projects to generate long-term, recurring and high-quality cashflows, based on typically 30-year concession agreements.
The company website is:&nbsp;<a href="http://edm.sgx.com/a/hBdjW0nB86%24MfB9zxYdAABR54sR/link8" target="_blank" rel="noopener">en.sunpower.com.cn</a>. Click&nbsp;<a href="http://edm.sgx.com/a/hBdjW0nB86%24MfB9zxYdAABR54sR/link9" target="_blank" rel="noopener">here</a>&nbsp;for the company's StockFacts page. For the six months ended 30 June 2019 financial results, click&nbsp;<a href="http://edm.sgx.com/a/hBdjW0nB86%24MfB9zxYdAABR54sR/link10" target="_blank" rel="noopener">here</a>. For SGX's 10 in 10 report on Sunpower Group Ltd, click&nbsp;<a href="http://edm.sgx.com/a/hBdjW0nB86%24MfB9zxYdAABR54sR/link11" target="_blank" rel="noopener">here</a>.
&nbsp;
About&nbsp;kopi-C: the Company brew
Text: Jennifer LH Tan Photo: Company file
kopi-C&nbsp;&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;<a href="http://edm.sgx.com/a/hBdjW0nB86%24MfB9zxYdAABR54sR/link12" target="_blank" rel="noopener">here</a>. &nbsp;
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;<a href="mailto:jennifer.tan@sgx.com" target="_blank" rel="noopener">jennifer.tan@sgx.com</a>


Sunpower
Engineer Frank Ma strives to live a life in 3D - the three Ds of diligence, determination and discipline, that is.&nbsp;  For the Co-Founder and Executive Director of SGX-listed environmental protection solutions provider Sunpower Group Ltd, these defining qualities are touchstones.  "Throughout my life, I've always set targets, and worked hard to achieve those goals," said the graduate of Nanjing Chemical Engineering Senior College, who also holds a Master's degree in Engineering Management from the University of Shanghai for Science and Technology.  Ma's tenacious spirit was never more obvious than when he taught himself to speak English more than three decades ago. "During my university days, my English was really bad. After graduation, I decided to do something about it," he recalled.  Having no teacher, and armed only with a dictionary and a voice recorder, Ma began memorising and reciting 20 English words every day for a year to build up his vocabulary. Today, his command of and fluency in the language belies that self-taught journey.  To be sure, Ma's focus and perseverance have stood him in good stead in growing Sunpower, which he founded in 1997 together with his university classmate, Executive Chairman and Chief Executive Officer Guo Hongxin.  In the late 90s, China began developing its petrochemical industry through oil and gas enterprises like China Petroleum &amp; Chemical Corporation, or Sinopec. But the need to import equipment - which resulted in long delivery lead times and escalating costs - was a serious bugbear.  "We were able to fill the gap in the market by supplying Sinopec with equipment, like pipe supports, that were made with local technology and know-how. This helped them save time and money," he said.  That was the milestone that marked the establishment of Sunpower's foundation business - Manufacturing &amp; Services (M&amp;S). This segment makes customised energy-saving and environmental protection products with proprietary heat transfer technologies for diverse industries, ranging from chemicals and petrochemicals to pharmaceuticals and metallurgy.&nbsp;  Sunpower has served over 1,500 customers, including top-notch global corporations in more than 30 countries to-date, and about 70% are repeat clients.&nbsp;  From its initial business of pipe supports, the Group went on to develop high-efficiency heat exchangers and pressure vessels, as well as heat pipes and heat pipe exchangers for recovery of waste heat in petchem, steel and chemical projects. Much later, it developed proprietary flare and flare gas recovery systems, used to recover petchem by-products from flare gas generated in a refinery during production.
&nbsp;
China's Smog Woes  But the petrochemical sector has its downsides, including capacity limitations and a cyclical nature. "We realised we needed to diversify, and expand our technology to other sectors such as pollution control," Ma noted.  China has increasingly suffered the scourge of polluted air since the country began industrialising, with inefficient, coal-fired boilers in industrial parks identified as one of the biggest culprits contributing to the heavy smog that regularly blankets its skies.&nbsp;  The window of opportunity for Sunpower to break into this market finally widened in 2015, when the Chinese government stepped up efforts to impose stringent environmental protection laws - including compulsory shuttering of small boilers and promotion of clean coal combustion - to improve the nation's air quality.  In 2016, Sunpower repositioned itself as an environmental protection services provider through its Green Investments (GI) business. The unit invests in, develops and operates centralised plants to supply steam, heat and electricity on an exclusive basis in industrial parks, replacing existing, inefficient coal-fired plants.&nbsp;  While its technology cuts the amount of coal used in power generation, it also supplements with alternative feedstock, such as sludge. Using its proprietary energy-saving and long-distance steam distribution pipeline technologies, energy- and time-efficient delivery to customers is ensured.  Sunpower is building a sizeable portfolio of such GI projects to generate long-term, recurring and high-quality cashflows, based on typically 30-year concession agreements.  This unit - the Group's value creator and growth driver - boasts a fully integrated business model, backed by its own design institute, in-house manufacturing and services solutions, as well as proprietary technologies.  With more than 400 researchers and design engineers, the Group owns 154 patents, including 60 invention patents. It has also taken the lead, or has participated, in the drafting of five engineering-related national standards that have become benchmarks for the rest of the industry.&nbsp;  The long-term growth potential of its GI business is secured by a robust pipeline of projects in different stages of evaluation, with total value pegged at more than RMB3.2 billion. As at August 2019, eight projects are in operation, while another five are either under construction or in the design phase.&nbsp;  Although the GI unit is in early stages of development and still ramping up, it has already contributed significantly to the Group's underlying operating cashflow for the first half of 2019, which has more than doubled year-over-year. GI revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) in 1H 2019 also roughly tripled from the previous year, accounting for more than 36% and 65% of group revenue and EBITDA respectively.&nbsp;  For Ma, the GI unit is akin to an expressway toll booth. "Steam is a non-discretionary input for our clients, and we're exclusive suppliers for the industrial parks we operate in. That gives us captive customers and the ability to obtain advance payments from them," he said.  "In that sense, we're like toll-keepers, collecting cash regularly."  This first-mover advantage, combined with its technological expertise and strong track record, gives Sunpower a significant competitive edge, he noted.  "Our stable and growing M&amp;S business complements our GI unit by efficiently controlling the cost of construction and eliminating project delays. This combination provides synergies that sets Sunpower apart from less-integrated firms."
&nbsp;
Targeting Clear Skies  In 2019, the Group was recognised as one of the Best Managed Companies in China by Deloitte Touche Tohmatsu, the largest of the "Big Four" accounting and audit firms, in the first year the award was introduced to the country.&nbsp;  Listed on Singapore Exchange since 2005, Sunpower has a current market capitalisation of about S$365 million. In the 2019 year-to-date, the stock has generated a total return of 39.1%, outperforming total returns of 6.5% and 8.2% for the benchmark Straits Times Index (STI) and broader FTSE ST All-Share Index respectively.  Looking ahead, prospects are bright, with environmental protection and pollution control continuing to play increasingly pivotal roles in China's national policies. "There's still much to be done to meet the central government's pollution reduction targets, and this offers enormous opportunity for us," Ma added.  A case in point is the Ministry of Ecology and Environment's crackdown on Shandong provincial officials for missing air quality targets earlier this year.&nbsp;"Such stringent enforcement by top-level officials will drive the long-term prospects of China's environmental protection industry, in particular, the anti-smog services sector that our GI unit is targeting."  To boost its GI operations, Sunpower plans to invest RMB2.5 billion of equity in green assets by 2021, compared to its equity investment and commitment of RMB1.6 billion as at mid-2019.&nbsp;  In terms of capacity, which includes plants under construction, the Group aims to grow its current gross annualised steam capacity of 21.5 million tons to 30 million tons, and current gross annualised electricity generation capacity of 2.1 million megawatt hours to 3.5 million megawatt hours.&nbsp;  This expansion will be funded internally and via capital from its convertible bond tranches. In 2017 and 2018, two strategic private equity investors - DCP Capital Partners and CDH China Management - invested in Sunpower by subscribing for its convertible bonds.&nbsp;  The Group's mergers and acquisitions (M&amp;A) strategy targets projects that serve a diversified customer base in stable, domestic-oriented, and cashflow-generative industries, such as textiles, printing and dyeing, food and beverage.&nbsp;  "We're also interested in brownfield projects that can contribute immediately to revenue and earnings, and where we can use our technology to further improve the acquired company's operating and financial performance," Ma noted.
&nbsp;
Promising Potential  Currently, the Group remains focused on GI prospects within China. "The market potential is huge, and that's our priority," he said.&nbsp;"The challenge is choosing the right target that will guarantee success according to our financial objectives, and that's where careful analysis and due diligence come in."  A self-confessed "control freak", Ma is all about drilling down into the specifics. "I'm a very detailed person, and I always try to prepare, forecast and plan as much as I can," he said with a grin.  In this regard, managing a business will always be his first love. "My passion lies in industry - developing strategy, overcoming challenges, driving innovation, and turning that innovation into sustainable cashflows and profits."  His fervour for enterprise has its roots in China's industrialisation and urbanisation drive, which kicked off as early as the 1930s - a period in the country's history marred by civil war and political strife.  "Back then, many enterprise owners believed manufacturing would form a base for the nation's development, and the setting up of industries would build the fundamentals of our economy, and thereby save our country," Ma said.  That belief has also laid the foundation for China's speedy transformation into an industrial powerhouse during the turn of the century.&nbsp;"That's why I have chosen to stay in industry, even though there have been opportunities to break away and do something different," he added.  When the 53-year-old is not planning and strategising for the future, he's enjoying the outdoors.  "I love nature, and enjoy climbing mountains all over the country. That's why I'm passionate about this business - I want to give China back her blue skies," he added.  The wine aficionado also believes in working hard and keeping things simple, a mantra he often shares with his son, 25.&nbsp;  "You need to add value to yourself and contribute to society. At the same time, it's important to strike a good work-life balance. After all, life is meant to be enjoyed," he smiled.  "And just like good wine, life is beautiful, deep, and full of complexity. Both should be savoured to the last drop."
&nbsp;
Sunpower Group Ltd
Founded in 1997, Sunpower&nbsp;is a China-based environmental protection solutions company specialising in proprietary energy-saving and clean power technologies, with a strong focus on anti-pollution investment projects. The Group operates two segments - Manufacturing &amp; Services (M&amp;S)&nbsp; and Green Investments (GI). The first segment develops customised energy-saving and environmental protection products with proprietary heat transfer technologies for diverse industries. The second segment - GI - focuses on the investment, development and operation of centralised heat, steam and electricity generation plants that replace existing, inefficient coal-fired plants in industrial parks. The Group is building a sizeable portfolio of GI projects to generate long-term, recurring and high-quality cashflows, based on typically 30-year concession agreements.
The company website is:&nbsp;en.sunpower.com.cn.  Click&nbsp;here&nbsp;for the company's StockFacts page.  For the six months ended 30 June 2019 financial results, click&nbsp;here.  For SGX's 10 in 10 report on Sunpower Group Ltd, click&nbsp;here.
&nbsp;
About&nbsp;kopi-C: the Company brew
Text: Jennifer LH Tan Photo: Company file
kopi-C&nbsp;&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;here. &nbsp;
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;jennifer.tan@sgx.com

Sunpower Eyes Green Assets in Battle for Blue Skies

Equity Bottom-Up

Ascendas Hospitality Trust / Equity Bottom-Up

<ul>
<li>This week (30-31 July) the Fed Reserve is expected to deliver a cut in the Fed Funds Rate with the possibility of a dovish outlook and room for more cuts, in addition to ending the preceding course of balance sheet reduction/ quantitative tightening ahead of September.</li>
<li>A key motivation for this potential rate cut are weaker global numbers particularly in the manufacturing and trade-related sectors. The same weak reports, with the trade impasses &amp; consequential outlooks, have impacted the region as noted in recent earnings reports. </li>
</ul>
<ul>
<li>The Singapore stock market has kept resilient with the recent global challenges. While the most traded manufacturing &amp; real estate stocks outpaced the STI in 2019 YTD, trade-related economic uncertainty has seen the manufacturing stocks twice as volatile as the real estate stocks. </li>
</ul>
Global Anticipation of a Fed Funds Rate Cut
By Thursday (31 July) 2am Singapore time, the Federal Reserve is expected to deliver a 25 basis points (‘bps”) cut in the Federal Funds Rate. Should the majority consensus prove correct, this would be the first US Federal Funds Rate cut since December 2008. The current rate target range for the Federal Funds Rate is 2.25% to 2.50%.
The last time the Federal Reserve moved interest rates back towards 2.00% was in April 2008, citing that in the United States economic growth had remained weak, labour market conditions had deteriorated further, and manufacturing activity was soft. This time around, the expected rate cut has been cited by Fed officials for some insurance against a sharper US slowdown (similar to 1995-1996). Beyond the expected 25 bps rate cut, markets will also be on the watch for a dovish tone statement by the Federal Reserve, with room for more cuts. In addition, the market will be looking to see if the Federal Reserve ends its agenda of balance sheet reduction/ quantitative tightening ahead of September.
Reasons for a Dovish Federal Reserve Highly Relevant to Singapore Economy
The particularly good news for Singapore’s trade-orientated sectors is that the current economic uncertainty faced by the changed trade climate is a large part of the Federal Reserve’s reasoning for their more dovish outlook.
As noted mid-July (click <a href="https://www2.sgx.com/research-education/market-updates/20190712-us-rate-speculation-fuelled-weeks-swing-singapore-stocks" target="_blank" rel="noopener">here</a>) the rationale for the dovish stance taken by the Federal Reserve Chair at the Semi-annual Monetary Policy Report to Congress, was weak global numbers “particularly in the manufacturing and trade-related sectors”. Some of that economic uncertainty was communicated in the record 2QFY19 results reported by DBS Group Holdings yesterday (click <a href="https://links.sgx.com/1.0.0/corporate-announcements/CTK2YWJHT81P7ZZD/c01e17d21c8731077faf9078e7e92419f49979244654d99ab3f44b15b6c27004" target="_blank" rel="noopener">here</a>). This was through moderate increases in the group's provisions, through increased expected credit losses on the back of “heightened economic uncertainty and geopolitical tensions”.
The same economic uncertainty faced by the group, and indeed the region, is a key motivator for the expected cut in the Fed Funds Rate.
Singapore Policies Aimed at Boosting Growth while Promoting Great Equity
The highly eventful month of July also saw the International Monetary Fund (“IMF”) release its annual report of its bilateral discussion with Singapore. The report (click <a href="https://www.imf.org/en/Publications/CR/Issues/2019/07/15/Singapore-2019-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-47119" target="_blank" rel="noopener">here</a>) highlighted that:
<ul>
<li>Singapore’s GDP per capita more than doubled in the last twenty years and income equality has been advancing since 2008/2009;</li>
<li>Policies have been aimed at boosting growth while promoting greater equity; and</li>
<li>As a highly open economy and an important financial center, Singapore is strongly influenced by developments in the region and the rest of the world.</li>
</ul>
Singapore’s economic growth is projected by the IMF to decline to 2.0% in 2019, below potential which is estimated at 2.5% in the medium term, with modern services becoming an increasingly important driver.
On the risks front, the report reiterated that as a financial and trading hub, Singapore is particularly exposed to a tightening of global financial conditions, escalation of sustained trade tensions, and deceleration of global growth. 
And as discussed above, the key trio of assessed external risks of a sharp tightening of global financial conditions, rising protectionism and retreat from multilateralism, and weaker than expected global growth overlap with the motivators for the expected dovish stance to be taken by the Federal Reserve at the imminent meeting.
Meanwhile on the domestic front, the IMF assessed the risk of a disorderly correction in Singapore property prices was a low likelihood, which compared to a low-to-medium likelihood for Australia, and a medium likelihood for Hong Kong, based on similar reports earlier in the year.
Diversified Stock Markets Provides for More Choice in Risk to Return 
Singapore’s stock market is highly diversified with the 200 most active stocks by turnover this year representing more than 20 different sectors or industries. The two sectors with the greatest representation by the number of stocks amongst the 200 stocks have been real estate stocks( or trusts) and manufacturing-related stocks. Together these two stock sectors accounted for more than two-fifths (40%) of the 200 most active stocks by turnover in 1H19.
In both instances, the average year-to-date total return of the stocks that make up those sectors has outpaced the STI’s 11.8% 2019 year-to-date total return. However economic uncertainty resulting from ongoing global trade discussions, in addition to expectations that the next move by the Federal Reserve will be an interest rate cut (following nine successive hikes) has seen the manufacturing stocks average twice the volatility of the real estate stocks.
&nbsp;
Both sectors have stocks well diversified by exposures to Singapore, the region and globally. However, the two distinct stock genres maintain different risk profiles, for instance:
<ul>
<li>Both in the July month-to-date and 2019 year-to-date, the manufacturing stocks have seen much greater swings and less consistency in the returns across the 24 relevant stocks than the 59 counterparts in Real Estate; &nbsp;</li>
<li>At the same time the best performing manufacturing stock in the July month-to-date, AEM Holdings, with its 16.5% total return doubled the month-to-date return of the best performing real estate stock over the period, OUE Commercial REIT (which was up 7.9%); &nbsp;</li>
<li>A similar observation was made in the 2019 year-to-date with&nbsp;manufacturing’s best performer Frencken Group generating a 79.7% total return compared to real estate’s Ascendas Hospitality Trust generating a 41.2% total return. &nbsp;</li>
<li>The average 12 month historical volatility of the 24 manufacturing stocks was 48% compared to 19% for the 59 Real Estate Stocks.</li>
</ul>
The 59 Real Estate stocks averaged a 17.9% total return in the 2019 year-to-date, with just two decliners amidst the 59 stocks.&nbsp;The Real Estate Investment Trusts (“REITs”) have been a key driver of the performance of the real estate stocks with the&nbsp;<a href="https://www2.sgx.com/indices/products/sreit" target="_blank" rel="noopener">iEdge S-REIT Index</a>&nbsp;generating a 21.9% total return in the 2019 year-to-date. Analysts attributed the strength to defensive flows into REITs in a risk-off environment (due to trade tensions) and growing expectations for a cut in the Federal Funds Rate. The REIT segment has also continued to expand and recently saw the debut of the third US office REIT (Prime US REIT) to list on SGX – click&nbsp;<a href="https://www2.sgx.com/research-education/market-updates/20190719-prime-us-reit-sgxs-3rd-pure-play-us-office-reit-makes" target="_blank" rel="noopener">here</a>&nbsp;for more.
By contrast, the 24 Manufacturing stocks averaged a 20.8% total return in the 2019 year-to-date, with five decliners amidst the 24 stocks. The below tables are sort by total returns for the 2019 year-to-date.


This week (30-31 July) the Fed Reserve is expected to deliver a cut in the Fed Funds Rate with the possibility of a dovish outlook and room for more cuts, in addition to ending the preceding course of balance sheet reduction/ quantitative tightening ahead of September.
A key motivation for this potential rate cut are weaker global numbers particularly in the manufacturing and trade-related sectors. The same weak reports, with the trade impasses &amp; consequential outlooks, have impacted the region as noted in recent earnings reports. 


The Singapore stock market has kept resilient with the recent global challenges. While the most traded manufacturing &amp; real estate stocks outpaced the STI in 2019 YTD, trade-related economic uncertainty has seen the manufacturing stocks twice as volatile as the real estate stocks. 

Global Anticipation of a Fed Funds Rate Cut
By Thursday (31 July) 2am Singapore time, the Federal Reserve is expected to deliver a 25 basis points (‘bps”) cut in the Federal Funds Rate. Should the majority consensus prove correct, this would be the first US Federal Funds Rate cut since December 2008. The current rate target range for the Federal Funds Rate is 2.25% to 2.50%.
The last time the Federal Reserve moved interest rates back towards 2.00% was in April 2008, citing that in the United States economic growth had remained weak, labour market conditions had deteriorated further, and manufacturing activity was soft. This time around, the expected rate cut has been cited by Fed officials for some insurance against a sharper US slowdown (similar to 1995-1996). Beyond the expected 25 bps rate cut, markets will also be on the watch for a dovish tone statement by the Federal Reserve, with room for more cuts. In addition, the market will be looking to see if the Federal Reserve ends its agenda of balance sheet reduction/ quantitative tightening ahead of September.
Reasons for a Dovish Federal Reserve Highly Relevant to Singapore Economy
The particularly good news for Singapore’s trade-orientated sectors is that the current economic uncertainty faced by the changed trade climate is a large part of the Federal Reserve’s reasoning for their more dovish outlook.
As noted mid-July (click here) the rationale for the dovish stance taken by the Federal Reserve Chair at the Semi-annual Monetary Policy Report to Congress, was weak global numbers “particularly in the manufacturing and trade-related sectors”. Some of that economic uncertainty was communicated in the record 2QFY19 results reported by DBS Group Holdings yesterday (click here). This was through moderate increases in the group's provisions, through increased expected credit losses on the back of “heightened economic uncertainty and geopolitical tensions”.
The same economic uncertainty faced by the group, and indeed the region, is a key motivator for the expected cut in the Fed Funds Rate.
Singapore Policies Aimed at Boosting Growth while Promoting Great Equity
The highly eventful month of July also saw the International Monetary Fund (“IMF”) release its annual report of its bilateral discussion with Singapore. The report (click here) highlighted that:

Singapore’s GDP per capita more than doubled in the last twenty years and income equality has been advancing since 2008/2009;
Policies have been aimed at boosting growth while promoting greater equity; and
As a highly open economy and an important financial center, Singapore is strongly influenced by developments in the region and the rest of the world.

Singapore’s economic growth is projected by the IMF to decline to 2.0% in 2019, below potential which is estimated at 2.5% in the medium term, with modern services becoming an increasingly important driver.
On the risks front, the report reiterated that as a financial and trading hub, Singapore is particularly exposed to a tightening of global financial conditions, escalation of sustained trade tensions, and deceleration of global growth. 
And as discussed above, the key trio of assessed external risks of a sharp tightening of global financial conditions, rising protectionism and retreat from multilateralism, and weaker than expected global growth overlap with the motivators for the expected dovish stance to be taken by the Federal Reserve at the imminent meeting.
Meanwhile on the domestic front, the IMF assessed the risk of a disorderly correction in Singapore property prices was a low likelihood, which compared to a low-to-medium likelihood for Australia, and a medium likelihood for Hong Kong, based on similar reports earlier in the year.
Diversified Stock Markets Provides for More Choice in Risk to Return 
Singapore’s stock market is highly diversified with the 200 most active stocks by turnover this year representing more than 20 different sectors or industries. The two sectors with the greatest representation by the number of stocks amongst the 200 stocks have been real estate stocks( or trusts) and manufacturing-related stocks. Together these two stock sectors accounted for more than two-fifths (40%) of the 200 most active stocks by turnover in 1H19.
In both instances, the average year-to-date total return of the stocks that make up those sectors has outpaced the STI’s 11.8% 2019 year-to-date total return. However economic uncertainty resulting from ongoing global trade discussions, in addition to expectations that the next move by the Federal Reserve will be an interest rate cut (following nine successive hikes) has seen the manufacturing stocks average twice the volatility of the real estate stocks.
&nbsp;
Both sectors have stocks well diversified by exposures to Singapore, the region and globally. However, the two distinct stock genres maintain different risk profiles, for instance:

Both in the July month-to-date and 2019 year-to-date, the manufacturing stocks have seen much greater swings and less consistency in the returns across the 24 relevant stocks than the 59 counterparts in Real Estate; &nbsp;
At the same time the best performing manufacturing stock in the July month-to-date, AEM Holdings, with its 16.5% total return doubled the month-to-date return of the best performing real estate stock over the period, OUE Commercial REIT (which was up 7.9%); &nbsp;
A similar observation was made in the 2019 year-to-date with&nbsp;manufacturing’s best performer Frencken Group generating a 79.7% total return compared to real estate’s Ascendas Hospitality Trust generating a 41.2% total return. &nbsp;
The average 12 month historical volatility of the 24 manufacturing stocks was 48% compared to 19% for the 59 Real Estate Stocks.

The 59 Real Estate stocks averaged a 17.9% total return in the 2019 year-to-date, with just two decliners amidst the 59 stocks.&nbsp;The Real Estate Investment Trusts (“REITs”) have been a key driver of the performance of the real estate stocks with the&nbsp;iEdge S-REIT Index&nbsp;generating a 21.9% total return in the 2019 year-to-date. Analysts attributed the strength to defensive flows into REITs in a risk-off environment (due to trade tensions) and growing expectations for a cut in the Federal Funds Rate. The REIT segment has also continued to expand and recently saw the debut of the third US office REIT (Prime US REIT) to list on SGX – click&nbsp;here&nbsp;for more.
By contrast, the 24 Manufacturing stocks averaged a 20.8% total return in the 2019 year-to-date, with five decliners amidst the 24 stocks. The below tables are sort by total returns for the 2019 year-to-date.

Market Update - Potential Rate Cut to Support Global Manufacturers & Region 

Potential Rate Cut to Support Global Manufacturers & Region 

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<ul>
<li>
SGX lists more than 700 companies with a combined market cap of nearly US$670 billion. Overseas listings comprise more than 45% of this total market cap. 
	 </li>
	<li>
There are more than 130 companies on SGX that are either headquartered or have their principal place of business in Hong Kong and/or Mainland China, with a combined market cap of over S$200 billion. Among them, pure China-based plays account for just under 100. 
	 </li>
	<li>Among the pure China-based plays, the five best performers in Jan-Feb 2019 were: Sunpower (+80.0%), China Jinjiang Environment (+38.0%), SIIC Environment (+36.4%), China Aviation Oil (+29.2%), and CITIC Envirotech (+19.7%). They have averaged a total return of +40.7% over the Jan-Feb period, bringing their 1Y and 3Y total returns to -11.1% and +30.2% respectively.</li>
</ul>
Singapore Exchange lists more than 700 companies with a combined market capitalisation of nearly US$670 billion. Overseas listings comprise more than 45% of this total market capitalisation. In comparison, the proportion of foreign companies listed on other exchanges ranges from over 1% for Stock Exchange of Hong Kong, 5% for the Nasdaq, more than 20% for London Stock Exchange and zero for Tokyo Stock Exchange.

Currently, there are more than 130 companies listed on SGX that are either headquartered or have their principal place of business in Hong Kong and/or Mainland China, and they have a combined market capitalisation of over S$200 billion.
<figure>
 <img src="https://api2.sgx.com/sites/default/files/2019-03/Foreign%20vs%20Domestic%20Listing%20on%20SGX.PNG" alt="Foreign vs Domestic Listings on SGX">
 </figure>
 <div class="content-caption">Foreign vs Domestic Listings on SGX</div>
In terms of pure China-based plays, there are just under 100 listings on SGX. Among these, the 10 best performers in January-February 2019 have a combined market cap of over S$15 billion, and their operations include utilities, oil and gas, real estate investment trusts (REITs), environmental services as well as industrial and construction machinery.

Among these 10, the five best performers in the first two months of the year were: Sunpower Group (+80.0%), China Jinjiang Environment (+38.0%), SIIC Environment (+36.4%), China Aviation Oil (+29.2%), and CITIC Envirotech (+19.7%). They have averaged a total return of +40.7% over the Jan-Feb period, bringing their one-year and three-year total returns to -11.1% and +30.2% respectively.

Three of the five best performers are REITs and/or real estate developers. For a recently published Market Update on China-related S-REITs and Developers, click <a href="https://www2.sgx.com/research-education/market-updates/20190215-highlights-china-related-s-reits-and-developers">here</a>.

The table below details the 10 best-performing pure China-based plays with market cap above S$200 million on SGX, sorted by Jan-Feb 2019 total returns

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Market Cap (S$M)
			</td>
			<td>
			Total Return Jan-Feb 19 (%)
			</td>
			<td>
			Total Return 1Y (%)
			</td>
			<td>
			Total Return 3Y (%)
			</td>
			<td>
			Div Yld (%)
			</td>
			<td>
			P/E (x)
			</td>
		</tr>
<tr>
<td>
			SUNPOWER GROUP
			</td>
			<td>
			5GD
			</td>
			<td>
			450
			</td>
			<td>
			80.0
			</td>
			<td>
			-0.6
			</td>
			<td>
			106.7
			</td>
			<td>
			0.3
			</td>
			<td>
			7.5
			</td>
		</tr>
<tr>
<td>
			CHINA JINJIANG ENVIRONMENT
			</td>
			<td>
			BWM
			</td>
			<td>
			852
			</td>
			<td>
			38.0
			</td>
			<td>
			16.8
			</td>
			<td>
			0.0
			</td>
			<td>
			0.0
			</td>
			<td>
			0.0
			</td>
		</tr>
<tr>
<td>
			SIIC ENVIRONMENT
			</td>
			<td>
			BHK
			</td>
			<td>
			964
			</td>
			<td>
			36.4
			</td>
			<td>
			-25.0
			</td>
			<td>
			-43.8
			</td>
			<td>
			5.4
			</td>
			<td>
			8.3
			</td>
		</tr>
<tr>
<td>
			CHINA AVIATION OIL
			</td>
			<td>
			G92
			</td>
			<td>
			1,118
			</td>
			<td>
			29.2
			</td>
			<td>
			-10.8
			</td>
			<td>
			120.3
			</td>
			<td>
			3.5
			</td>
			<td>
			9.0
			</td>
		</tr>
<tr>
<td>
			CITIC ENVIROTECH
			</td>
			<td>
			CEE
			</td>
			<td>
			1,174
			</td>
			<td>
			19.7
			</td>
			<td>
			-35.8
			</td>
			<td>
			-32.0
			</td>
			<td>
			1.6
			</td>
			<td>
			10.8
			</td>
		</tr>
<tr>
<td>
			SASSEUR REIT
			</td>
			<td>
			CRPU
			</td>
			<td>
			868
			</td>
			<td>
			19.2
			</td>
			<td>
			0.0
			</td>
			<td>
			0.0
			</td>
			<td>
			9.4
			</td>
			<td>
			0.8~
			</td>
		</tr>
<tr>
<td>
			CHINA EVERBRIGHT WATER
			</td>
			<td>
			U9E
			</td>
			<td>
			1,017
			</td>
			<td>
			16.7
			</td>
			<td>
			-20.3
			</td>
			<td>
			-25.8
			</td>
			<td>
			2.6
			</td>
			<td>
			8.9
			</td>
		</tr>
<tr>
<td>
			YANGZIJIANG SHIPBUILDING
			</td>
			<td>
			BS6
			</td>
			<td>
			5,642
			</td>
			<td>
			14.4
			</td>
			<td>
			-1.3
			</td>
			<td>
			71.8
			</td>
			<td>
			3.1
			</td>
			<td>
			8.6
			</td>
		</tr>
<tr>
<td>
			YANLORD LAND
			</td>
			<td>
			Z25
			</td>
			<td>
			2,666
			</td>
			<td>
			13.9
			</td>
			<td>
			-12.9
			</td>
			<td>
			42.2
			</td>
			<td>
			4.7
			</td>
			<td>
			3.5
			</td>
		</tr>
<tr>
<td>
			EC WORLD REIT
			</td>
			<td>
			BWCU
			</td>
			<td>
			606
			</td>
			<td>
			10.1
			</td>
			<td>
			8.8
			</td>
			<td>
			0.0
			</td>
			<td>
			8.0
			</td>
			<td>
			0.9~
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			27.8
			</td>
			<td>
			-8.1
			</td>
			<td>
			23.9
			</td>
			<td>
			3.9
			</td>
			<td>
			7.1
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 28 Feb 2019 &amp; 5 March 2019)

~ P/B instead of P/E ratios used as more relevant for REITs

China’s Growth Outlook

China reduced its economic growth target for 2019 to 6%-6.5%, compared with a goal of “about 6.5%” announced for last year, as it struggles with a debt legacy and ongoing trade tensions with the US. The gross domestic product (GDP) growth target was released on Tuesday in Premier Li Keqiang’s annual work report to the National People’s Congress. The lower band of the target would be the country’s slowest pace of economic growth in almost three decades.

The World Bank already expects a further slowdown in the world’s second-largest economy this year. The agency has forecast growth of 6.2% in 2019, slightly below its previous projections as a result of weaker exports, and down from 6.5% expansion in 2018, it said in the January edition of its “<a href="https://www.worldbank.org/en/news/press-release/2019/01/08/darkening-prospects-global-economy-to-slow-to-29-percent-in-2019-as-trade-investment-weaken">Global Economic Prospects</a>” report.

Between 1999 and 2014, China has averaged a significantly stronger annual economic growth rate of 9.6%, reaching as high as over 14% in 2007. In recent years, the moderation in its growth rates, which still remain above the developing-economy average, has coincided with the government’s policy of pursuing high-quality, rather than high-speed, growth
</body></html>





SGX lists more than 700 companies with a combined market cap of nearly US$670 billion. Overseas listings comprise more than 45% of this total market cap. 
	 
	
There are more than 130 companies on SGX that are either headquartered or have their principal place of business in Hong Kong and/or Mainland China, with a combined market cap of over S$200 billion. Among them, pure China-based plays account for just under 100. 
	 
	Among the pure China-based plays, the five best performers in Jan-Feb 2019 were: Sunpower (+80.0%), China Jinjiang Environment (+38.0%), SIIC Environment (+36.4%), China Aviation Oil (+29.2%), and CITIC Envirotech (+19.7%). They have averaged a total return of +40.7% over the Jan-Feb period, bringing their 1Y and 3Y total returns to -11.1% and +30.2% respectively.

Singapore Exchange lists more than 700 companies with a combined market capitalisation of nearly US$670 billion. Overseas listings comprise more than 45% of this total market capitalisation. In comparison, the proportion of foreign companies listed on other exchanges ranges from over 1% for Stock Exchange of Hong Kong, 5% for the Nasdaq, more than 20% for London Stock Exchange and zero for Tokyo Stock Exchange.

Currently, there are more than 130 companies listed on SGX that are either headquartered or have their principal place of business in Hong Kong and/or Mainland China, and they have a combined market capitalisation of over S$200 billion.

      
    
    Foreign vs Domestic Listings on SGX
In terms of pure China-based plays, there are just under 100 listings on SGX. Among these, the 10 best performers in January-February 2019 have a combined market cap of over S$15 billion, and their operations include utilities, oil and gas, real estate investment trusts (REITs), environmental services as well as industrial and construction machinery.

Among these 10, the five best performers in the first two months of the year were: Sunpower Group (+80.0%), China Jinjiang Environment (+38.0%), SIIC Environment (+36.4%), China Aviation Oil (+29.2%), and CITIC Envirotech (+19.7%). They have averaged a total return of +40.7% over the Jan-Feb period, bringing their one-year and three-year total returns to -11.1% and +30.2% respectively.

Three of the five best performers are REITs and/or real estate developers. For a recently published Market Update on China-related S-REITs and Developers, click here.

The table below details the 10 best-performing pure China-based plays with market cap above S$200 million on SGX, sorted by Jan-Feb 2019 total returns




			Name
			
			
			SGX Code
			
			
			Market Cap (S$M)
			
			
			Total Return Jan-Feb 19 (%)
			
			
			Total Return 1Y (%)
			
			
			Total Return 3Y (%)
			
			
			Div Yld (%)
			
			
			P/E (x)
			
		


			SUNPOWER GROUP
			
			
			5GD
			
			
			450
			
			
			80.0
			
			
			-0.6
			
			
			106.7
			
			
			0.3
			
			
			7.5
			
		


			CHINA JINJIANG ENVIRONMENT
			
			
			BWM
			
			
			852
			
			
			38.0
			
			
			16.8
			
			
			0.0
			
			
			0.0
			
			
			0.0
			
		


			SIIC ENVIRONMENT
			
			
			BHK
			
			
			964
			
			
			36.4
			
			
			-25.0
			
			
			-43.8
			
			
			5.4
			
			
			8.3
			
		


			CHINA AVIATION OIL
			
			
			G92
			
			
			1,118
			
			
			29.2
			
			
			-10.8
			
			
			120.3
			
			
			3.5
			
			
			9.0
			
		


			CITIC ENVIROTECH
			
			
			CEE
			
			
			1,174
			
			
			19.7
			
			
			-35.8
			
			
			-32.0
			
			
			1.6
			
			
			10.8
			
		


			SASSEUR REIT
			
			
			CRPU
			
			
			868
			
			
			19.2
			
			
			0.0
			
			
			0.0
			
			
			9.4
			
			
			0.8~
			
		


			CHINA EVERBRIGHT WATER
			
			
			U9E
			
			
			1,017
			
			
			16.7
			
			
			-20.3
			
			
			-25.8
			
			
			2.6
			
			
			8.9
			
		


			YANGZIJIANG SHIPBUILDING
			
			
			BS6
			
			
			5,642
			
			
			14.4
			
			
			-1.3
			
			
			71.8
			
			
			3.1
			
			
			8.6
			
		


			YANLORD LAND
			
			
			Z25
			
			
			2,666
			
			
			13.9
			
			
			-12.9
			
			
			42.2
			
			
			4.7
			
			
			3.5
			
		


			EC WORLD REIT
			
			
			BWCU
			
			
			606
			
			
			10.1
			
			
			8.8
			
			
			0.0
			
			
			8.0
			
			
			0.9~
			
		


			Average
			
			
			 
			
			
			 
			
			
			27.8
			
			
			-8.1
			
			
			23.9
			
			
			3.9
			
			
			7.1
			
		

Source: Bloomberg &amp; StockFacts (data as of 28 Feb 2019 &amp; 5 March 2019)

~ P/B instead of P/E ratios used as more relevant for REITs

China’s Growth Outlook

China reduced its economic growth target for 2019 to 6%-6.5%, compared with a goal of “about 6.5%” announced for last year, as it struggles with a debt legacy and ongoing trade tensions with the US. The gross domestic product (GDP) growth target was released on Tuesday in Premier Li Keqiang’s annual work report to the National People’s Congress. The lower band of the target would be the country’s slowest pace of economic growth in almost three decades.

The World Bank already expects a further slowdown in the world’s second-largest economy this year. The agency has forecast growth of 6.2% in 2019, slightly below its previous projections as a result of weaker exports, and down from 6.5% expansion in 2018, it said in the January edition of its “Global Economic Prospects” report.

Between 1999 and 2014, China has averaged a significantly stronger annual economic growth rate of 9.6%, reaching as high as over 14% in 2007. In recent years, the moderation in its growth rates, which still remain above the developing-economy average, has coincided with the government’s policy of pursuing high-quality, rather than high-speed, growth



Five Best-Performing China-Based Plays Avg 41% Total Return in Jan-Feb

Sunpower Group is an environmental protection solutions specialist in China with 20 years of proven track record in the environmental protection and energy saving industry. It has two business segments –Green Investments (GI) and Manufacturing &amp; Services (M&amp;S). Sunpower is a pioneer in supporting China’s anti-smog and clean energy initiatives.

Sunpower Group is an environmental protection solutions specialist in China with 20 years of proven track record in the environmental protection and energy saving industry. It has two business segments –Green Investments (GI) and Manufacturing &amp; Services (M&amp;S). Sunpower is a pioneer in supporting China’s anti-smog and clean energy initiatives.

10 in 10 – Sunpower Group Limited (SPWG SP) - Going Full Steam

China

Founded in 1997 and listed in 2005, Sunpower Group Limited (5GD.SI / SPWG SP) is an environmental protection company specialising in fighting air pollution using proprietary energy-saving and clean power technologies. Since 2017, Sunpower has expanded heavily into “Green Investments” (GI), its sizeable and valuable portfolio of anti-smog investment projects that generate long-term, recurring and high-quality cashflows and now account for more than half of recurring profits and cashflow. The “Manufacturing & Service” (M&S) business provides a variety of high-end customised environmental protection products and solutions to approximately 1,500 customers across 15 industries in over 30 countries, such as Wanhua Chemical, Hengli Petrochemical, CNOOC, CNPC, SINOPEC, ExxonMobil, BASF, BP, Shell, and many others. 70% of them are repeat customers.

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Sunpower Group (SPWG SP)

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SGX lists more than 700 companies with a combined market cap of nearly US$670 billion. Overseas listings comprise more than 45% of this total...

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10 in 10 – Sunpower Group Limited (SPWG SP) - Going Full Steam

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Singapore Exchange Ltd (SGX)

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