Singtel (SGX: Z74)
Singtel has entered a share purchase agreement to acquire an additional 3.78% stake in its Thai associateIntouch Holdings Public Company Limited(“Intouch”) (BKK: INTUCH).
The consideration payable is approximately S$330 million and will be paid for in cash.
The purchase price was set at a 5% discount to the volume-weighted average price for Intouch’s shares.
Singtel currently owns 21.21% of Intouch and this acquisition will raise its ownership stake to 24.99%.
This move represents Singtel’s commitment to the Thai market and reinforces the telco’s position as two of the largest shareholders of the Intouch, alongsideGulf Energy(BKK: GULF).
Through its increased stake in Intouch, Singtel will also increase its economic interest inAdvanced Info Services(BKK: ADVANC), or AIS.
AIS has been an associate of Singtel since 1999 and is Thailand’s largest mobile operator with more than 45 million customers.
Thailand’s digital economy is projected to nearly double from US$30 billion in 2021 to US$56 billion in 2025, said Singtel CEO Yuen Kuan Moon, adding that this move is part of the group’s strategy for recycling capital to invest forgrowth.
In addition, Thailand is expected to boost its telecommunication infrastructure and deploy 5G technology as part of the country’s digital transformation initiative.
It is estimated that end-user spending on IT services could grow by 12.1% per annum to reach US$3.4 billion by 2026.
These numbers should significantly boost Singtel’s Thai associates’ prospects and allow for steady and sustained growth in the years ahead.
Singapore Airlines Limited (SGX: C6L)
Source: Singapore Airlines’ Operating Statistics; Author’s Compilation
The latest numbers have been released by Singapore Airlines Limited, or SIA, and show that the recovery in air travel is gaining steam.
Passenger numbers for May saw a 17.4% month on month rise from April’s 1.45 million, clocking in at 1.7 million.
Compared with May last year, it was a more than 14-fold jump and showcases the pent-up demand for air travel.
SIA has noted that air travel recovery has been strong for all regions apart from North Asia (read: China).
Passenger capacity hit 61% in May, up from 57% a month ago.
Passenger load factor was 78.2%, up from 72.7% in April and saw a sharp 63.9 percentage point increase from a year ago.
As of end-May, SIA’s group network covered a total of 97 destinations including Singapore.
There may be more upside to come for the airline.
Singapore Tourism Board reported that 418,310 visitors came to Singapore last month, a nearly 42% jump compared to April.
However, it was still less than one-third of the 1.5 million visitors registered in May 2019, before the pandemic broke out.
Sea Limited (NYSE: SE)
Shopee, the e-commerce arm of US-listed Sea Limited, has announced that it is pulling out of Spain.
At the same time, the unit is retrenching staff in Southeast Asia and South America.
The exit comes less than a year after Shopee launched in Spain, and is the e-commerce arm’s third exit from an international market in less than a year.
Back in March, Shopee abruptly shut its India business and also exited France.
In addition, Sea Limited has also announced global layoffs for ShopeePay and ShopeeFood, its digital wallet and food delivery businesses.
Shopee CEO Chris Feng has cited “elevated uncertainty” as the principal reason for the job cuts and exit.
Sea Limited has, however, made significant headway in Latin America, a region that is dominated by e-commerce giantMercadolibre(NASDAQ: MELI).
Analysts believe that this pullback can help Sea Limited to conserve cash amid an increasingly competitive environment with a looming economic slowdown to boot.
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DBS Group (SGX: D05)
The bluest of theblue chipshas to be DBS Group, Singapore’s largest bank.
DBS offers a comprehensive range of banking services to both corporates and individuals.
The bank has proven resilient thus far, reporting itssecond-highest net profitfor the first quarter of fiscal 2022 (1Q2022).
It has also been active on the acquisition front, buying up India’sLakshmi Vilas Bankin 2020 and more recently,Citigroup’s(NYSE: C)Taiwan consumer banking business.
The lender is also trying to broaden its income streams by setting up adigital exchangeand has also collaborated withSingapore Exchange Limited(SGX: S68),Temasek HoldingsandStandard Chartered Bank(LON: STAN) to set up Climate Impact X, a carbon credits marketplace.
Meanwhile, the US Federal Reserve has raised the benchmark interest rate by 0.75 percentage points recently, its biggest increase since 1994.
DBS should see its net interest margin and income rise in tandem with the rising interest rate.
Sheng Siong Group Ltd (SGX: OV8)
Sheng Siong is one of the largest supermarket chains in Singapore and operates 65 outlets across the island.
The group sells a wide variety of products ranging from fresh foods to essentials such as toiletries and household products.
The retailer is a good investment option for those who are seeking stability, as its focus on essential goods puts it in a good position to weather downturns.
For 1Q2022, Sheng Siong announced a 6% year on year rise in revenue to S$358 million.
Net profit improved by 13.9% year on year to S$35.2 million.
The group paid out a total of S$0.062 in dividends for FY2021, translating to a historical dividend yield of 4.1% for its shares.
CEO Lim Hock Chee plans to grow the business by opening three to five new stores per year over the next three to five years.
He also plans to improve on Sheng Siong’s e-commerce capabilities to reach customers in areas where the group does not currently have a presence.
UMS Holdings (SGX: 558)
If you’re looking to gain exposure to the growing semiconductor industry, UMS Holdings may be a good choice.
The group is a one-stop-shop that provides equipment manufacturing and engineering services to manufacturers of semiconductors and related products.
UMS reported a good set of numbers for 1Q2022, with revenue surging 71% year on year to S$84.7 million.
Net profit rose 26% year on year to S$19.4 million, and the group declared an interim dividend of S$0.01, unchanged from last year.
Free cash flow was healthy at S$18.7 million, up from S$14.8 million a year ago.
CEO Andy Luong is optimistic about the group’s outlook as he sees accelerating capital expenditure from global wafer fab players.
Fab equipment spending is set to post healthy growth and will remain above the US$100 billion mark. Industry capacity is projected to rise by 8% this year and a further 6% next year.
Raffles Medical Group (SGX: BSL)
If you’re looking for a recession-proof industry, healthcare immediately comes to mind.
Raffles Medical Group, or RMG, is an integrated healthcare provider operating in 14 cities within five countries.
The group operates three tertiary hospitals and more than 100 multi-disciplinary clinics that offer a wide range of medical and diagnostic services.
The hospital operator reported a sparkling set of earnings for FY2021 as it successfully pivoted its business to help the government manage the COVID-19 pandemic.
Revenue climbed 27.4% year on year to S$723.8 million while net profit rose 27.7% year on year to S$84.2 million.
A final dividend of S$0.028 was paid out, giving its shares a trailing dividend yield of 2.5%.
With borders reopening around the world, medical tourism should also resume, boosting RMG’s prospects for FY2022.
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source: THE SMART INVESTOR
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