The Utilities sector on SGX is made up of companies that are in the business of providing gas, electricity or water. While traditionally thought of as defensive in nature, with population growth as a key driver, Utilities stocks have shown themselves to have comparable volatility (and growth potential) with the broader stock market.
The five largest capitalised Utility stocks on SGX are Keppel Infrastructure Trust, CITIC Envirotech, China Everbright Water, China Jinjiang Environment and SIIC Environment Holdings, which has a combined market capitalisation of about $5.7 billion. These five stocks started 2019 strong, delivering an average year-to-date return of 17%.
In this instalment of 4 Stocks This Week, we’ll take a closer look at four of these stocks.
Keppel Infrastructure Trust (SGX: A7RU)
At about $1.95 billion, Keppel Infrastrucutre Trust is the largest capitalised stock in the SGX Utilities sector is. As a business trust, it has a portfolio of infrastructure assets across Energy (28%), Distribution & Network (53%) and Water & Waste (19%).
Strategic assets owned by Keppel Infrastructure Trust include Keppel Merlimau Cogen, a 1,300 MW power plant on Jurong Island, the SingSpring Desalination Plant, Keppel Seghers Ulu Pandan NEWater Plant and two waste-to-energy (WTE) plants. These projects are secured with long-term contracts, which provide much greater certainty compared to other commercial or hospitality trusts.
Keppel Infrastructure Trust’s largest single shareholder is Temasek Holdings, which owns 15.86% of stocks. Keppel Infrastructure Trust closed this week at $ 0.505.
CITIC Envirotech Ltd. (SGX: CEE)
Headquartered in Singapore, CITIC Envirotech provides water and wastewater treatment, water supply, and recycling services in the People’s Republic of China, Singapore, the United States, and Malaysia.
CITIC Envirotech is a subsidiary of CITIC Limited, which is one of the largest conglomerates in China, with businesses than span financial services, natural resources and energy, manufacturing, as well as real estate and infrastructure.
The company operates through its four segments of Environmental Engineering, Water Treatment, and Membrane Manufacturing and Sales. In particular, the company designs and builds membrane-based water and wastewater treatment systems. It also works on wastewater treatment projects, as well as manufacturing and distributing a range of membrane products and systems. The company primarily serves the chemical, petrochemical, and industrial park sectors.
CITIC Envirotech closed at $ 0.475 this week, giving it a market capitalisation of about S$ 1.15 billion.
China Everbright Water Limited (SGX: U9E)
China Everbright Water provides integrated environmental water services across various regions in China, including Beijing, Jiangsu, Shandong, Shaanxi, Henan, Hubei, Liaoning and the Inner Mongolia Autonomous Region. The company is headquartered in Shenzhen, the People’s Republic of China.
Services provided include water environment management, river-basin ecological restoration, reusable water, sludge treatment and disposal, research and development of water technologies as well as engineering and construction.
As of December 31, 2017, the company has invested in and operated water treatment projects with a daily waste water treatment capacity of around 5.34 million cubic metres.
China Everbright Water closed this week at HK$ 2.083 (S$ 0.36), which gives it a market cap of S$ 963.38 million.
China Jinjiang Environment Holding Company Limited (SGX: BWM)
China Jinjiang Environment is a leading waste-to-energy operator in China and India, building and operating plant that provide waste treatment services while generating and selling electricity and steam. The company also operates a thermal power and renewable resources collection plants.
As of 31 December, 2017, the company operated 20 waste-to-energy facilities in 12 provinces, autonomous regions, and municipalities in China with a total waste treatment capacity of 28,280 tons/day and an installed electricity power generation capacity of 521 MW. It also had 3 more waste-to-energy facilities under construction, and 21 more of such projects in the preparation pipeline. If all of these facilities are fully built and acquired, the company would have a waste treatment capacity of 59,261 tons/day.
China Jinjiang Environment closed at 2.909 CNY (S$ 0.585) this week, with a market cap of about $844 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.