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4 Stocks This Week (Manufacturing) [17 January 2020] – ST Engineering; Yangzijiang; Wilmar; Fu Yu

22% of Singapore’s nominal Gross Domestic Product comes from the Manufacturing sector.


With the signing of the US-China Phase 1 trade deal this week, a corner seems to have turned for trade tensions that began nearly 2 years ago, when US President Trump he would begin to levy tariffs on imported solar panels and washing machines from China, and the subsequent escalation on both sides.

These trade tensions and tariffs among two of the worlds largest economies had far-reaching consequences, including in Singapore, where 22% of Singapore’s nominal Gross Domestic Product comes from Manufacturing.

Despite these challenges, the Manufacturing sector on SGX have remained robust, with some counters seeing healthy growth.

For this week’s instalment of 4 Stocks This Week, we will examine four companies with manufacturing businesses and good showings.

Read Also: Creating Your Investment Portfolio: 4 Reasons Why Singapore Investors Need Overseas Exposure

ST Engineering (SGX: S63)

ST Engineering is global technology, defence and engineering group based in Singapore with four main business units: Aerospace, Electronics, Land Systems, and Marine. The company employs 22,000 people and has offices in Asia, the Americas, Europe and the Middle East.

In addition to serving its core customers in the defence industry, the company also has substantial government and commercial projects, with more than 500 smart city projects completed with its suite of smart mobility, smart security and smart environment solutions.

The company continues to run trials of autonomous vehicles with ST Engineering on Jurong Island and Sentosa in partnership with SBS Transit, and would stand to benefit from the successful launch of the Hunter Armoured Fighting Vehicle late last year.

ST Engineering is a constituent of indices like the FTSE Straits Times Index, MSCI Singapore, SGX ESG Transparency Index and SGX ESG Leaders Index.

The company continues to execute its Share Buy-Back mandates, which would positively support its share price (most recently on 13 January and 3 January), which closed at $4.20 this week.

Yangzijiang Shipbuilding (SGX: BS6)

Headquartered in the People’s Republic of China, Yangzijiang (YZJ) Shipbuilding is in the business of commercial shipbuilding, producing a range of vessels such as bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, and offshore supply vessels.

In August 2019, YZJ founder and Chairman Ren Yuanlin had to take a leave of absence so he could focus on “assisting in a confidential investigation carried out by certain PRC governmental authorities”. YZJ’s stock took such a tumble that trading had to be halted.

Four months later (in December 2019), Mr Ren returned from his leave of absence and YZJ’s stock rallied at the news.

Most recently, on 10 January 2020, the company announced that Mr Ren’s son, Ren Letian will be taking over as Chairman and general manager of the company. Mr Ren Letian was acting as the alternate director and chief executive during his father’s absence. Analysts have also noted that the bulk of YZJ’s USD $700 million is new orders this financial year were secured while Mr Ren Letian was at the helm.

YZJ has a market cap of $4.6 billion and is member of the FTSE Straits Time Index. The stock closed at $1.16 this week.

Read Also: Investing In China: Here Are 4 Different Ways You Can Get Investment Exposure

Wilmar International (SGX: F34)

Wilmar is among Asia’s leading agribusiness group, with over 500 manufacturing plants and an extensive distribution network covering 50 countries, including China, India, and Indonesia.

The company employs around 90,000 people and has its main businesses doing oil palm cultivation, oilseed crushing, edible oils refining, sugar milling and refining, manufacturing of consumer products, specialty fats, biodiesel and fertilisers, as well as flour and rice milling.

Wilmar is listed on the FTSE Straits Time Index, and the stock closed at $4.25 this week.

Fu Yu (SGX: F13)

Established in 1978 and listed on SGX Mainboard in 1995, Fu Yu Corporation Limited is one of the largest providers of integrated services for the manufacturing of precision plastic components and precision moulds and dies in Asia. Fu Yu’s customers include blue chip companies in printing and imaging, networking and communications, medical and automotive sectors.

The company employs around 2,517 people and has manufacturing facilities in Singapore, Malaysia and various parts of China, including Shanghai, Suzhou, Chongqing, Zhuhai and Dongguan.

The company continues to maintain a robust financial position. According to their 2018 Annual Report, the company had a cash balance of $80.3 million with zero borrowings, while generating operating cash flow of $23.3 million.

Fu Yu’s share price this week was $0.285, giving it a total market capitalisation of $214.6 million.

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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.