The Straits Times Index (STI) closed this week at 3382 points, or about 17.4% higher than it was at the end of 2016. This is its strongest annual price performance for the STI in five years, when it gained 19.7% in 2012. The STI also boasts one of the region’s highest dividend yields, with year-to-date distributions in 2017 bumping up STI’s total return to above 22%.
For reference, STI’s annual price performance for 2016, 2015, 2014 and 2013 were -0.07%, -14.34%, 6.24% and 0.01% respectively.
The Hotel, Restaurant And Leisure Industry
SGX classifies the Hotels, Restaurant and Leisure industry as part of the Consumer Discretionary Sector.
In 2017, the industry continued to expand through new listings, with the 20 biggest companies in the industry averaging 20.1% in total returns. In general, the industry performed better in the 2017 year-to-date than in 2016.
Tourism, growing business demand, rising incomes and population growth are some of the trends that are favourable for the industry. At the same time, companies would need to continue to adapt to innovations like the proliferation of meal delivery services and disruptions like Airbnb.
As written about previously, last month saw the listing of two food and beverage operators: No Signboard Holdings and RE&S Holdings. Together with Kimly, which listed earlier this year, these three debuting companies averaged 14.7% total returns from their IPO prices.
For this week, we will look at four companies in the Hotels, Restaurant and Leisure industry who delivered the best year-to-date performance. They are Shangri-La Asia (+87.4%), Genting Singapore PLC (+52.0%) and Mandarin Oriental International (+48.9%) and BreadTalk (46.7%).
Shangri-La Asia Limited (SGX: S07)
With a market capitalisation of $10.1 billion, Shangri-La Asia Limited is an investment holding company that owns and operates hotels, golf clubs and related properties around the world. The company also owns and leases commercial properties and serviced residences, and is involved in real estate development and operation activities; as well as wines trading activities.
Headquartered in Hong Kong, the company operates hotels under brands such as Shangri-La, Hotel Jen, Traders Hotel, Rasa, Summer Palace, and Shang Palace.
After delivering a respectable 18.4% return in 2016, its total return for 2017 year-to-date is a substantial 87.4%. Its stock closed this week at $2.80.
Genting Singapore PLC (SGX: G13)
Genting Singapore PLC is involved in the development, management, and operation of integrated destination resorts, primarily Resorts World Sentosa, which comprises of a casino, Universal Studios Singapore theme park, Adventure Cove Waterpark, S.E.A. Aquarium, and meeting, incentive, convention, and exhibition (MICE) facilities.
Beyond Singapore, it is also involved in the gaming and integrated resort activities in Australia, United Kingdom, Malaysia, the Philippines, and the Bahamas. Genting Singapore PLC is a subsidiary of Genting Overseas Holdings Limited.
With a market capitalisation of $16.1 billion, its total return year-to-date for 2017 is 52%, while its 2016 total return was 21.6%. It stock closed this week at $1.31.
Mandarin Oriental International Limited (SGX: M04)
Mandarin Oriental Hotel Group is an international hotel investment and management group with 30 hotels and 8 residences in 19 countries and territories, primarily in Hong Kong, the rest of Asia, Europe, and the Americas. It is majority-owned by Jardine Strategic Holdings, which owns 77.2%.
In a filing on 15 September 2017, Mandarin Oriental International said it has received proposals from potential purchasers to acquire The Excelsior. Stock price of Mandarin Oriental surged 20.8% after this announcement, though Mandarin Oriental declined to comment of how many bids it received for The Excelsior.
Its stock price at this week’s closed was $2.62. Listed in 2005, the company’s total return for 2017 year-to-date is 48.9%.
BreadTalk Group Limited (SGX: 5DA)
The homegrown BreadTalk Group Limited was founded in 2000 and has since rapidly expanded to become a recognisable household brand that has also spawned other properties like Toast Box, Food Republic, and Din Tai Fung.
Today, BreadTalk and it franchisees operate more than 850 bakeries, around 30 restaurants and about 60 Food Republic food courts all around the world, including China, Thailand, Malaysia, Indonesia, the Philippines, Kuwait, Vietnam, Bahrain, Sri Lanka, Lebanon, and Qatar.
The company also manufactures and retails various food products, as well as wholesaling confectionery and bakery products. processing, selling, and distributing premium coffee beans and tea dust; and distributing related processing equipment.
After achieving 5.4% total returns in 2016, BreadTalk’s total returns year-to-date is 46.7%. The company has a market cap of $462 million and closed trading at $1.61 this week.
Learning More About Companies On SGX
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