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4 Stocks This Week (Tech Stocks) [7 August 2020] AEM; Keppel DC; Synagie; Frencken

Singapore is home to high-tech companies that apply their expertise to advanced manufacturing, data centres, and e-commerce.


The pace and breath of technological advancement has changed the way we live, work and play in modern times, and it has also made technology companies immensely valuable. In the United States, the famous FAANG – made up of Facebook, Apple, Amazon, Netflix and Google (Alphabet) – have combined market capitalization in the trillions, and these companies have such dominance that the US Congress have called on their CEOs to testify about anti-competitiveness.

In Singapore, technology is an important pillar in our drive towards Industry 4.0, and will lead the charge towards increased productivity and the creation of greater value across all business sectors, including finance, manufacturing, education, retail, entertainment, and more.

On SGX, there are a range of listed companies whose core business are in technology solutions, including data centres, semiconductors, electronics, precision engineering, e-commerce and data communications.

Read Also: How To Invest In Technology Companies, Beyond The Famous ‘FAANG’?

AEM (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.

Over the past few years, the company has built up advanced testing solutions capabilities, allowing it to perform system-level testing from wafer level to package level, panels and interconnects. 5G end-markets will also be a key focus for the company moving forward, where the company’s expertise in high volume and demanding manufacturing would be to their advantage.

AEM Holdings reported a record FY2019 (ending 31 December 2020) financial performance, achieving revenue of $323 million, which has been followed by $274 million in revenue and net profit of $55.3 million in 1H2020. On 3 August 2020, AEM proposed an interim dividend of 5 cents per share.

AEM has been a darling of investors, and the company’s stock saw a Year-To-Date total return of 114% as of 6 August 2020, allowing its market value to rise above the coveted $1 billion mark.

AEM closed this week at $4.22.

Read Also: 4 Things That Business Owners Get Wrong About Industry 4.0

Keppel DC REIT (SGX: AJBU)

Listed on 12 December 2014, Keppel DC REIT is the first pure-play data centre REIT listed in Asia on the SGX. Keppel DC REIT’s investment strategy is to principally invest, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate-related assets.

Internet Enterprises make up 48% of Keppel DC REIT’s rental income. The widespread lockdowns in Singapore and around the world accelerated the adoption of digital technology, and the data centre industry remains resilient, supporting data storage and processing requirements of the digital economy.

Future trends such as rapid cloud adoption, smart technologies, big‐data analytics, and 5G deployment bode well for future prospects of the data centre market.

As the largest stock on the STI Reserve List, Keppel DC REIT reported that for 1H2020 (ended 30 June 2020), gross revenue climbed 30% Year-On-Year, which will be pleasing news to Temasek, its largest single shareholder (21.53%).

The REIT closed this week at $3.04, which represents a Year-To-Date total return of about 49% (as of 6 August 2020).

Synagie Corporation (SGX: V2Y)

Synagie Corporation Ltd. was established in 2014 and is one of the leading E-commerce solutions providers in Southeast Asia in the Body, Beauty and Baby (BBB) sector.

The group helps their brand partners sell goods or services to consumers online, providing one-stop services to manage multi-channel e-commerce operations across the value chain, including online store operations, content management, digital marketing, customer service as well as warehousing and fulfilment.

They have over 250 brand partners in the BBB sector, which include small and medium enterprises (SMEs) and multi-national corporations (MNCs). Some of the prominent brands include Johnson & Johnson, Kimberly-Clark and Shiseido.

Their platform-based, asset-light business model has three business segments, namely E-commerce, E-logistics and InsurTech, centering around the cloud-based Synagie Platform which leverages on technology like Cloud Computing, Big Data Analytics and Artificial Intelligence.

The company listed on SGX on 8 August 2018 at an offer price of $0.27, which saw an impressive oversubscription of approximately 4.3 times and raising a total of $11.6 million.

Synagie closed the week at $0.195, which represented a Year-To-Date total return of 52% (as of 6 August 2020).

Read Also: Half-Time Report: How IPOs In Singapore Are Faring In 2018

Frencken Group (SGX: E28)

Frencken Group Limited is a global high-tech capital and consumer equipment service provider of integrated one-stop outsourcing solutions.

Through its two divisions of Mechatronics and Integrated Manufacturing Services, the company serves a diverse base of customers globally, including Europe, Asia and USA, in medical, semiconductor, analytical, industrial automation, automotive, office automation and consumer industries.

The company has a network of production facilities, including The Netherlands, Singapore, China, Malaysia and USA.

Frencken enjoyed a total Year-To-Date return of 32% (as of 6 August 2020), and the stock closed at $1.15 this week.

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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.