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.

Asia’s leading multi-asset exchange

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

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

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Singapore’s secondary listing of Top Glove has generated a 325% total return in the 2020 YTD, while ranking amongst the top 50 stocks by turnover with an average of S$6.1 million in turnover per day. The stock is paying a MYR 0.165 Interim Dividend that goes Ex-Div. on 24 Dec. 
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The five largest primary-listed stocks on SGX that report more than half of group revenues to Malaysia are: Riverstone, Straits Trading, GSH, Aspen and ISEC Healthcare. Together the five stocks generated a median decline of 4% in the 2020 YTD, with highly dispersed returns.  
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	<li>Malaysia’s economy shrank 2.7% in 3Q 2020, rebounding from a record contraction of 17.1% in 2Q. Domestic economic growth is seen declining 4.5% in 2020, before recovering to expand 6.5%-7.5% next year, according to government projections. </li>
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In the third quarter of this year, Malaysia’s economy posted a quarter-on-quarter recovery with a smaller decline of 2.7% in GDP, compared with a record contraction of 17.1% in the second quarter of 2020. The last time the country registered negative rates for quarterly GDP growth was in 2009. The domestic economy is forecast to shrink 4.5% in 2020, and rebound with a growth of between 6.5% and 7.5% next year, according to government projections.

Singapore’s secondary listing of Top Glove Corporation Bhd has generated a 325% total return in the 2020 year-to-date, while ranking amongst the top 50 stocks by turnover with an average of S$6.1 million in turnover per day. Since the stock’s high of S$3.18 on 19 October, it has been recipient to net retail inflows of S$38 million. Top Glove Corporation Bhd is paying a MYR 0.165 Interim Dividend that goes Ex-Dividend on 24 December. For its 1QFY21 (ended 30 Nov) Top Glove Corp Bhd the highest ever quarterly Sales Revenue of RM4.76 billion, representing an increase of 294% compared with 1QFY20. Profit after tax attributable to owners of the parent surged by 20 times to RM2.38 billion, exceeding the Group’s profit for the full FY20. Meanwhile, Sales Volume grew by 34% versus 1QFY20.

The five largest primary-listed stocks on SGX that report more than half of group revenues to Malaysia are: Riverstone Holdings, Straits Trading Company, GSH Corporation, Aspen (Group) Holdings and ISEC Healthcare.

 

Riverstone Holdings

<ul>
<li>Due to the surge in global demand for personal protection equipment amid the Covid-19 pandemic, average selling price of the Group’s healthcare examination gloves has maintained its upward momentum since June 2020</li>
	<li>The Group’s high-tech cleanroom gloves has also experienced strong volume growth and several increases in average selling price during this period due to robust demand</li>
	<li>This led to a significantly improved performance for <a href="https://links.sgx.com/1.0.0/corporate-announcements/9CRPWFHOBWA6751P/638392_Riverstone%20-%20Voluntary%20Announcement%203QFY2020.pdf">3Q 2020</a>, as the Group recorded a 92.0% YoY increase in revenue to RM482.3 million</li>
	<li>While certain production costs such as packaging and raw material costs have risen during this period, the surge in average selling prices of glove products has led to a 389.6% YoY increase in gross profit to RM251.6 million for 3Q2020</li>
	<li>With cash and cash equivalents amounting to RM427.3 million as at the end of 30 September 2020, the Group remains well-positioned to carry out its expansion plans to drive future growth, and weather the macroeconomic headwinds associated with the Covid-19 pandemic</li>
	<li>Phase 6 of the Group’s expansion plans is on track to raise total production capacity by 1.5 billion pieces to 10.5 billion pieces of gloves annually by the end of 2020</li>
	<li>For phase 6, the Group has commissioned five production lines which are currently in operation, with a remaining two production lines to be commissioned progressively over the next two months</li>
	<li>Due to the strong demand for both healthcare and cleanroom gloves, the Group’s current order book has been filled for 1H 2021</li>
	<li>Construction of the Group’s latest production facility for phase 7 of its expansion plans is currently ongoing</li>
	<li>With phase 7, the Group will add seven production lines in 2021, with the first line of this new phase ready in April 2021</li>
	<li>This is expected to add up to 1.5 billion pieces of gloves to bring total annual production capacity by up to 12.0 billion pieces by 4Q 2021</li>
	<li>At this early stage, all of the new capacity coming online for phase 7 have already been taken up by the Group’s customers.</li>
	<li>Beyond phase 7 which is currently under construction, it has in-place a clear expansion roadmap that will increase production capacity by up to 1.5 billion pieces of gloves each year to a total of up to 15.0 billion pieces by end-FY2023</li>
	<li>This represents a growth rate of approximately 59% from the expected capacity of 10.5 billion gloves at the end of FY2020</li>
</ul>
 

Straits Trading Company

<ul>
<li>On 15 October 2020, STC said its unit has inked a binding commitment letter to sell the trust beneficiary interests in certain <a href="https://links.sgx.com/1.0.0/corporate-announcements/EJ4521JPOEE5UGHQ/635330_Disposal.pdf">residential properties in Tokyo</a> for about 18.95 billion yen</li>
	<li>The proposed disposal is in line with Straits Trading's strategy of redeploying capital from its existing property portfolio of high-quality but low-yielding investment properties into potentially higher-return real estate opportunities</li>
	<li>For <a href="https://links.sgx.com/1.0.0/corporate-announcements/ETSA0B9VKYMLZIBA/627832_1H2020MediaRelease.pdf">1H ended 30 June 2020</a>, STC reported EBITDA of S$27.7 million and profit after tax and non-controlling interests of S$5.5 million</li>
	<li>The Covid-19 pandemic resulted in lower valuations of investment properties, losses in its hospitality associate, disruptions in the supply and demand chain for tin, as well as a decline in the market value of investment securities over 1H2020</li>
	<li>In addition, the Group’s performance for the first half was also lower due to the absence of one-off income and divestment gains booked in 1H2019</li>
	<li>The Group continued to benefit from the strength and diversity of its real estate ecosystem with its Real Estate segment posting an EBITDA of S$36.6 million in 1H2020</li>
	<li>Straits Real Estate (SRE) demonstrated resilience in its performance, especially in its Japan investments and logistics portfolio in Australia and South Korea</li>
</ul>
 

GSH Corporation

<ul>
<li>Net profit attributable to shareholders for <a href="https://links.sgx.com/1.0.0/corporate-announcements/CLNHITY6DS3O0FQ6/626539_GSH%20-%201H%202020%20Results%20Press%20Release.pdf">1H 2020</a> reached S$395,000, thanks to a 14.7% rise in group revenue to S$65.8 million</li>
	<li>This was boosted by the continued progressive sales recognition from its two residential development projects – Eaton Residences in Kuala Lumpur and Coral Bay in Kota Kinabalu – which drove revenue from its Property segment up 94.0% to S$41.8 million</li>
	<li>For 1H 2020, revenue from the Group’s hospitality business, which comprises two hotels in Sutera Harbour Resort and an island resort in the Mantanani Islands in Sabah, decreased 58.8% to S$14.8 million</li>
	<li>The hospitality business was impacted by the emergence of the pandemic in China and South Korea, which ultimately led to a suspension of all domestic and international travellers to Sabah following the imposition of the Movement Control Order by the Malaysian government</li>
	<li>The Group reported, for the first time, that its new Trading segment – through its 50.4%-owned joint venture company, GSH International Enterprise in Qingdao, Shandong Province – posted 1H revenue of S$9.2 million since it commenced operations late 2019</li>
	<li>The joint venture provides a one-stop, fully integrated frozen foods supply chain ranging from purchasing, logistics, to financing through the major ports in China</li>
	<li>In the next few years, the joint venture plans to develop a B2B digital platform for a complete supply chain solution, integrating suppliers, logistics providers and buyers onto an integrated online platform</li>
</ul>
 

Aspen (Group) Holdings 

<ul>
<li>The Group achieved revenue of RM62.4 million in <a href="https://links.sgx.com/1.0.0/corporate-announcements/ICVT35QCGGUFJHFL/640906_AGH_Business%20Update_30%20Nov%202020.pdf">3Q FY2020</a>, a RM6.9 million increase in revenue compared to 2Q</li>
	<li>The increase was contributed from additional units sold in Tri Pinnacle and Vervea, as well as the progressive construction of Beacon Executive Suites and Vertu Resort during the Movement Control Order phase</li>
	<li>In 3Q FY2020, the Group recorded profit before tax of RM74.9 million, the main contributor of which was the share of a gain on the revaluation of investment properties by the Group’s associated company</li>
	<li>There remains significant uncertainty in the operating environment due to Covid-19 pandemic</li>
	<li>Group earnings and operating cashflows may continue to face headwinds from the disruptions to businesses</li>
	<li>Notwithstanding the immediate challenges, the Group remains committed to its transformation and diversification efforts</li>
	<li>The successful completion of its placement on 18 November 2020 has raised an aggregate of S$23.8 million which will strengthen the Group’s liquidity position and balance sheet</li>
	<li>The Group is prudently managing its expenses, cashflow and liquidity to turn “headwinds” into “tailwinds” by seeking out new opportunities that will strengthen its capabilities and competitiveness in key markets</li>
</ul>
 

ISEC Healthcare

<ul>
<li>Group revenue for <a href="https://links.sgx.com/1.0.0/corporate-announcements/C6NVQ2A80MLZPWY2/635974_ISEC%203Q2020%20Results%20Announcement%2021102020.pdf">3Q 2020</a> was S$11.17 million, up 3% YoY, due to contributions from its recent Indah Specialist acquisition; excluding this contribution, group revenue declined 7% YoY</li>
	<li>The business activities of the Group in both Malaysia and Singapore had decreased in 3Q 2020 from a year ago due to the outbreak of COVID-19</li>
	<li>In 3Q2020, thanks to grants and rental rebates from the support measures by the respective governments to relieve operations affected by COVID-19, net profit amounted to S$2.53 million in 3Q 2020, up from a net profit of S$1.67 million in the year-ago period</li>
	<li>While demand for some of its services are expected to gradually pick up when control measures are progressively lifted, the Group’s financial performance for FY2020 is likely to be lower as compared to FY2019, as Malaysia’s government tightens measures in terms of interstate travelling, and implements various movement restrictions across states</li>
	<li>While ISEC KL, being one of the Group’s main revenue contributors, remains opened for business, its operations may be affected by these measures</li>
	<li>In view of the situation, ISEC KL’s Ophthalmologists have accepted a reduction in their salaries by 15% in October 2020</li>
	<li>The Group will continue to monitor the situation and its impact to the clinic operations in the following months and beyond</li>
	<li>In an effort to reach out to the neighbourhood for the provision of eye checks and related services, the Group intends to set up an eye service centre within the general practice clinic premise of JL Medical (Yew Tee) in Singapore</li>
	<li>The Group will be commencing refurbishment works and applying for medical clinic license for such services later this year</li>
</ul>
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Singapore’s secondary listing of Top Glove has generated a 325% total return in the 2020 YTD, while ranking amongst the top 50 stocks by turnover with an average of S$6.1 million in turnover per day. The stock is paying a MYR 0.165 Interim Dividend that goes Ex-Div. on 24 Dec. 
	 
	
The five largest primary-listed stocks on SGX that report more than half of group revenues to Malaysia are: Riverstone, Straits Trading, GSH, Aspen and ISEC Healthcare. Together the five stocks generated a median decline of 4% in the 2020 YTD, with highly dispersed returns.  
	 
	Malaysia’s economy shrank 2.7% in 3Q 2020, rebounding from a record contraction of 17.1% in 2Q. Domestic economic growth is seen declining 4.5% in 2020, before recovering to expand 6.5%-7.5% next year, according to government projections. 

 

In the third quarter of this year, Malaysia’s economy posted a quarter-on-quarter recovery with a smaller decline of 2.7% in GDP, compared with a record contraction of 17.1% in the second quarter of 2020. The last time the country registered negative rates for quarterly GDP growth was in 2009. The domestic economy is forecast to shrink 4.5% in 2020, and rebound with a growth of between 6.5% and 7.5% next year, according to government projections.

Singapore’s secondary listing of Top Glove Corporation Bhd has generated a 325% total return in the 2020 year-to-date, while ranking amongst the top 50 stocks by turnover with an average of S$6.1 million in turnover per day. Since the stock’s high of S$3.18 on 19 October, it has been recipient to net retail inflows of S$38 million. Top Glove Corporation Bhd is paying a MYR 0.165 Interim Dividend that goes Ex-Dividend on 24 December. For its 1QFY21 (ended 30 Nov) Top Glove Corp Bhd the highest ever quarterly Sales Revenue of RM4.76 billion, representing an increase of 294% compared with 1QFY20. Profit after tax attributable to owners of the parent surged by 20 times to RM2.38 billion, exceeding the Group’s profit for the full FY20. Meanwhile, Sales Volume grew by 34% versus 1QFY20.

The five largest primary-listed stocks on SGX that report more than half of group revenues to Malaysia are: Riverstone Holdings, Straits Trading Company, GSH Corporation, Aspen (Group) Holdings and ISEC Healthcare.

 

Riverstone Holdings


Due to the surge in global demand for personal protection equipment amid the Covid-19 pandemic, average selling price of the Group’s healthcare examination gloves has maintained its upward momentum since June 2020
	The Group’s high-tech cleanroom gloves has also experienced strong volume growth and several increases in average selling price during this period due to robust demand
	This led to a significantly improved performance for 3Q 2020, as the Group recorded a 92.0% YoY increase in revenue to RM482.3 million
	While certain production costs such as packaging and raw material costs have risen during this period, the surge in average selling prices of glove products has led to a 389.6% YoY increase in gross profit to RM251.6 million for 3Q2020
	With cash and cash equivalents amounting to RM427.3 million as at the end of 30 September 2020, the Group remains well-positioned to carry out its expansion plans to drive future growth, and weather the macroeconomic headwinds associated with the Covid-19 pandemic
	Phase 6 of the Group’s expansion plans is on track to raise total production capacity by 1.5 billion pieces to 10.5 billion pieces of gloves annually by the end of 2020
	For phase 6, the Group has commissioned five production lines which are currently in operation, with a remaining two production lines to be commissioned progressively over the next two months
	Due to the strong demand for both healthcare and cleanroom gloves, the Group’s current order book has been filled for 1H 2021
	Construction of the Group’s latest production facility for phase 7 of its expansion plans is currently ongoing
	With phase 7, the Group will add seven production lines in 2021, with the first line of this new phase ready in April 2021
	This is expected to add up to 1.5 billion pieces of gloves to bring total annual production capacity by up to 12.0 billion pieces by 4Q 2021
	At this early stage, all of the new capacity coming online for phase 7 have already been taken up by the Group’s customers.
	Beyond phase 7 which is currently under construction, it has in-place a clear expansion roadmap that will increase production capacity by up to 1.5 billion pieces of gloves each year to a total of up to 15.0 billion pieces by end-FY2023
	This represents a growth rate of approximately 59% from the expected capacity of 10.5 billion gloves at the end of FY2020

 

Straits Trading Company


On 15 October 2020, STC said its unit has inked a binding commitment letter to sell the trust beneficiary interests in certain residential properties in Tokyo for about 18.95 billion yen
	The proposed disposal is in line with Straits Trading's strategy of redeploying capital from its existing property portfolio of high-quality but low-yielding investment properties into potentially higher-return real estate opportunities
	For 1H ended 30 June 2020, STC reported EBITDA of S$27.7 million and profit after tax and non-controlling interests of S$5.5 million
	The Covid-19 pandemic resulted in lower valuations of investment properties, losses in its hospitality associate, disruptions in the supply and demand chain for tin, as well as a decline in the market value of investment securities over 1H2020
	In addition, the Group’s performance for the first half was also lower due to the absence of one-off income and divestment gains booked in 1H2019
	The Group continued to benefit from the strength and diversity of its real estate ecosystem with its Real Estate segment posting an EBITDA of S$36.6 million in 1H2020
	Straits Real Estate (SRE) demonstrated resilience in its performance, especially in its Japan investments and logistics portfolio in Australia and South Korea

 

GSH Corporation


Net profit attributable to shareholders for 1H 2020 reached S$395,000, thanks to a 14.7% rise in group revenue to S$65.8 million
	This was boosted by the continued progressive sales recognition from its two residential development projects – Eaton Residences in Kuala Lumpur and Coral Bay in Kota Kinabalu – which drove revenue from its Property segment up 94.0% to S$41.8 million
	For 1H 2020, revenue from the Group’s hospitality business, which comprises two hotels in Sutera Harbour Resort and an island resort in the Mantanani Islands in Sabah, decreased 58.8% to S$14.8 million
	The hospitality business was impacted by the emergence of the pandemic in China and South Korea, which ultimately led to a suspension of all domestic and international travellers to Sabah following the imposition of the Movement Control Order by the Malaysian government
	The Group reported, for the first time, that its new Trading segment – through its 50.4%-owned joint venture company, GSH International Enterprise in Qingdao, Shandong Province – posted 1H revenue of S$9.2 million since it commenced operations late 2019
	The joint venture provides a one-stop, fully integrated frozen foods supply chain ranging from purchasing, logistics, to financing through the major ports in China
	In the next few years, the joint venture plans to develop a B2B digital platform for a complete supply chain solution, integrating suppliers, logistics providers and buyers onto an integrated online platform

 

Aspen (Group) Holdings 


The Group achieved revenue of RM62.4 million in 3Q FY2020, a RM6.9 million increase in revenue compared to 2Q
	The increase was contributed from additional units sold in Tri Pinnacle and Vervea, as well as the progressive construction of Beacon Executive Suites and Vertu Resort during the Movement Control Order phase
	In 3Q FY2020, the Group recorded profit before tax of RM74.9 million, the main contributor of which was the share of a gain on the revaluation of investment properties by the Group’s associated company
	There remains significant uncertainty in the operating environment due to Covid-19 pandemic
	Group earnings and operating cashflows may continue to face headwinds from the disruptions to businesses
	Notwithstanding the immediate challenges, the Group remains committed to its transformation and diversification efforts
	The successful completion of its placement on 18 November 2020 has raised an aggregate of S$23.8 million which will strengthen the Group’s liquidity position and balance sheet
	The Group is prudently managing its expenses, cashflow and liquidity to turn “headwinds” into “tailwinds” by seeking out new opportunities that will strengthen its capabilities and competitiveness in key markets

 

ISEC Healthcare


Group revenue for 3Q 2020 was S$11.17 million, up 3% YoY, due to contributions from its recent Indah Specialist acquisition; excluding this contribution, group revenue declined 7% YoY
	The business activities of the Group in both Malaysia and Singapore had decreased in 3Q 2020 from a year ago due to the outbreak of COVID-19
	In 3Q2020, thanks to grants and rental rebates from the support measures by the respective governments to relieve operations affected by COVID-19, net profit amounted to S$2.53 million in 3Q 2020, up from a net profit of S$1.67 million in the year-ago period
	While demand for some of its services are expected to gradually pick up when control measures are progressively lifted, the Group’s financial performance for FY2020 is likely to be lower as compared to FY2019, as Malaysia’s government tightens measures in terms of interstate travelling, and implements various movement restrictions across states
	While ISEC KL, being one of the Group’s main revenue contributors, remains opened for business, its operations may be affected by these measures
	In view of the situation, ISEC KL’s Ophthalmologists have accepted a reduction in their salaries by 15% in October 2020
	The Group will continue to monitor the situation and its impact to the clinic operations in the following months and beyond
	In an effort to reach out to the neighbourhood for the provision of eye checks and related services, the Group intends to set up an eye service centre within the general practice clinic premise of JL Medical (Yew Tee) in Singapore
	The Group will be commencing refurbishment works and applying for medical clinic license for such services later this year




Five Largest Malaysian-Focused Stocks on SGX

Gsh Corp Ltd

Five Largest Malaysian-Focused Stocks on SGX