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4 Stocks This Week (Technology) [30 August 2019] – AEM; Chuan Hup; CSE Global; Silverlake Axis

Rather than just fear how technology is disrupting industries and jobs, why not invest in and benefit from technology stocks?


It has been about a year since the start of the US-China trade war, which has caused electronics manufacturers around the world to relook their supply chains as they strive to thrive in uncertain trade policies and economic conditions.

On SGX, there are many companies that deal with the manufacturing of high-tech electronics, as well as the provision of information technology solutions. The 20 largest SGX stocks in the IT Sector have a combined market capitalisation of about $15 billion.

For many of these companies, the diversified nature of their operations and propriety offerings mean that they are still able to maintain growth. Between January and July 2019, the SGX Information Technology (IT) sector was the best-performing segment, generating a total return of 29.8%, including dividends.

For our 4 Stocks This Week Column, we’ll be looking at 4 companies in the IT sector that have delivered healthy total returns year-to-date.

AEM Holdings (SGX: AWX)

AEM Holdings provides customised system solutions to advanced manufacturers across various industries around the world, as well as designing and manufacturing precision engineering products used in the electronics, life sciences, instrumentation and aerospace industries.

The company also deals with chemical product formulations for surface finishing in the electronics industry, as well as supplying mechanical design and programmable logic control (PLC) equipment.

AEM Holdings achieved a total return Year-To-Date of about 42.1%, thanks in part to securing large contracts to be delivered in FY2019. On 25 July 2019, the company raised revenue guidance for FY19 from $225 million-$250 million to $209 million-$255 million.

On 8 Aug 2019, AEM reported net profits for 2Q2019 ended 30 June 2019 to be $15.7 million, up 65.4% year-on-year, while revenue increased 34.8% to $97.9 million over the same period.

On 15 August 2019, the company announced favourable court rulings regarding two appeal cases surrounding the sale of its plating business and shareholding interest in AEM (Suzhou) Co., Ltd. to Yunyi Electric Co., Ltd.

AEM closed this week at $1.06, giving it a market capitalisation of $311 million.

Chuan Hup Holdings (SGX: C33)

Chuan Hup Holdings started in 1970 as a tug and barge service provider to PSA Corporation in Singapore. Today, the company owns and manages a diversified portfolio of strategic investments, including electronics manufacturing services, property, and vessel management.

In particular, the company’s electronics manufacturing services segment is involved with printed circuit board assembly, custom user interface design and manufacture, and turnkey electronics manufacturing.

Chuan Hup Holdings gave a total return Year-To-Date of  about 29.7%. It closed this week at $0.265, with a market cap of $246 million.

CSE Global (SGX: 544)

CSE Global began life in 1985 as the engineering projects division of Chartered Electronics Industries, the electronics arm of Singapore Technologies (ST). In January 1997, management buy-out was successfully carried out to spin off CSE, and the company listed on the SGX mainboard in February 1999.

Today, the company employs more than 1,100 in its 36 offices around the world, and offers cost-effective, integrated solutions to the automation, telecommunications, environmental, and Oil & Gas sectors.

In its 14 August 2019 results filing, the company reported revenues of $185.3 million, a modest increase of 0.5%, while net profit increased 1.9% to $10.2 million.

The company achived a total return Year-To-Date of around 24.0%. The stock’s last done price was $0.44, giving it a market capitalisation of $544 million.

Silverlake Axis (SGX: 5CP)

Silverlake Axis is a fintech company which develops solutions for the Banking, Insurance, Retail, Payment and Logistics industries. It has contracts with banks like as OCBC and CIMB to provide digital  banking solutions.

Silverlake Axis clocked a total return Year-To-Date of about 24.8% in spite of market uncertainties. This is thanks in part to their status as a strategic partner of large financial institutions in Asia, and being responsible for maintaining and enhancing mission-critical IT systems.

In their 23 August 2019 results release, Silverlake Axis reported net attributable profit for the full-year ended 30 June 2019 increasing 83% year-on-year to RM245.6 million, while revenue rose 26% to RM680.8 million.

On 29 August 2019, the company announced that they secured a contract to assist in the digital transformation of an established consumer credit provider in Malaysia, replacing existing legacy systems with a new platform to streamline its consumer financing process. The project is expected to be completed by 2020.

Silverlake Axis closed out the week at $0.455, giving it a current market capitalisation of $1.375 billion.

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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.