According to an SGX report published on 21 Jan 2021, Singapore stocks that have recently ranked highly for Growth Factor Exposure have kept pace, and been marginally stronger than Value stock counterparts in January (through to 21 Jan). This group of 20 Growth stocks that ranked highly for growth factor exposure in mid-2020 has continued doing well in 2021 thus far, averaging a 6% gain, marginally higher than the 20 Value stocks averaging a 5% return.
Growth stocks typically display earnings growth and the two growth metrics used by FactorResearch for selecting stocks with Growth Factor exposure include 3-year sales-per-share and earnings-per-share growth. You can read here to understand their assessment criteria.
In this edition of 4 Stocks This Week, we look at 4 growth stocks in Singapore that have shown good gains in 2021 thus far.
AEM Holdings (SGX: AWX)
After delivering a return of 75% to its shareholders in 2020, AEM Holdings (SGX: AWX) is off to a strong start in 2021. Since the start of the year, its share price is up 19% and it’s now trading at $4.16. Back on 19 Mar 2020, its shares were trading at $1.37.
In November 2020, AEM Holdings announced that its net profit for the 9M2020 is at S$79.6 million, up from S$36.0 million for 9M2019. With higher revenue and earnings in 2020, this has translated into its share price increasing likewise. It’s currently trading at a price-to-earnings (PE ratio) of 13.3.
Yangzijiang Shipbuilding (SGX: BS6)
Yangzijiang (SGX: BS6) is a large shipbuilding company which is based in the People’s Republic of China. With its main business in commercial shipbuilding, it came as no surprise that the financial markets were not confident of Yangzijiang’s short-term outlook back in the 1H2020. In fact, Yangzijiang share price dropped from $1.06 on 20 Feb 2020 to $0.785 on 23 March 2020. It ended 2020 at $0.955.
Since then, the company has done reasonably well. For example, in its 3Q2020 result announcement, the company recorded a higher gross profit margin of 35%, compared to 20% in 3Q2019. This resulted in a higher gross profit of RMB 1.26 billion for 3Q2020, compared to the gross profit of RMB 1.06 billion in 3Q2019. The company remains very strong with cash and cash equivalent of RMB 9.94 billion as of 3Q2020.
While Yangzijiang returns for 2020 were -11%, its total return for 2021 thus far is at 14%. As of 22 Jan 2020, its share price is at $1.05.
DBS Group Holdings (SGX: D05)
By market capitalisation, DBS (SGX: D05) is the biggest company listed on the SGX with a market capitalisation of about S$67 billion. It’s not only the largest bank in Singapore, but also in Southeast Asia. In total, DBS operates in 18 markets including Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Philippines, Taiwan, Thailand, UEA, UK, USA, Vietnam, and of course, Singapore.
Like most other stocks, DBS took a tumble during the March 2020 stock market crash from $24.85 on 24 Feb to $16.88 on 23 March. For those who wanted to invest in Singapore’s largest company, that would have been the perfect time to invest because the company has recovered well since then. It gave its investors a 2% return in 2020 and is up 5% thus far in 2021.
OCBC (SGX: O39)
Another bank that is worth considering is OCBC (SGX: O39). OCBC also has a strong regional and global presence, in Australia, China, Hong Kong, Indonesia, Japan, Myanmar, South Korea, Taiwan, Thailand, UK, USA and Vietnam.
In 2020, total returns for OCBC investors was – 2%. Thus far in 2021, returns for investors are at 5% for the year. With a market capitalisation of about S$47.5 billion, the company is currently trading at a PE ratio of 12.3, which is very similar to DBS.
At the start of the year, OCBC announced that Helen Wong will be its new CEO from 15 Apr 2021 onwards. This will also make her the first woman to head a Singapore bank.
To find out the complete list of growth stocks in Singapore and their performance thus far, you can refer to the SGX Market Update report here.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.