Weekly | Top Glove Leads the Market Again

As of the close on Friday, $Straits Times Index(STI.SI)$ closed at 3,202.59 points, down 0.19% points last week.

During the last 5 trading days, $TOP GLOVE CORPORATION BHD(BVA.SI)$, $YANGZIJIANG SHIPBLDG HLDGS LTD(BS6.SI)$, $DFIRG USD(D01.SI)$, $FIRST RESOURCES LIMITED(EB5.SI)$ and $SINGAPORE AIRLINES LTD(C6L.SI)$ are the top 5 Weekly gainers, up 9.38%, 7.63%, 7.37%, 6.47% and 6.10% respectively.

$GENTING SINGAPORE LIMITED(G13.SI)$, $SINGAPORE POST LIMITED(S08.SI)$, $SHANGRI-LA ASIA LIMITED(S07.SI)$, $KEPPEL DC REIT(AJBU.SI)$ and $NIO Inc.(NIO.SI)$ are top 5 decliners of SGX stocks which market capital above S$1 Bln.

Below are key analyses of the TOP 5 gainers:

1. $TOP GLOVE CORPORATION BHD(BVA.SI)$

The pandemic may seem like a distant memory now, but it had the effect of boosting the fortunes of several sectors such as technology, rubber gloves, and personal protective equipment.

Top Glove released its fiscal 2023’s second quarter (2Q FY2023) earnings for the period ending 28 February 2023. The glove maker saw its revenue plunge by 58.2% year on year from RM 1.48 billion to RM 618 million.

Operating expenses, however, fell by just 43.1% year on year to RM 785.8 million. Revenue dipped by 2% qoq from RM 633 million in 1Q FY2023 while net loss was 2% lower qoq.

The good news is that sales volume grew 6% qoq as customers showed signs of replenishing their inventories.

2. $YANGZIJIANG SHIPBLDG HLDGS LTD(BS6.SI)$

The 'return' is the income the business earned over the last year. One way to conceptualize this is that for each SGD1 of shareholders' capital it has, the company made SGD0.15 in profit. At first glance, Yangzijiang Shipbuilding (Holdings) seems to have a decent ROE. Especially when compared to the industry average of 9.5% the company's ROE looks pretty impressive.

Despite having a normal three-year median payout ratio of 34% (implying that the company keeps 66% of its income) over the last three years. In addition, Yangzijiang Shipbuilding (Holdings) has been paying dividends over a period of at least ten years suggesting that keeping up dividend payments is way more important to the management even if it comes at the cost of business growth.

3. $DFIRG USD(D01.SI)$

DFI Retail Group D01 0.00% says it has seen a “significantly improved” y-o-y performance in the 1QFY2023 ended March 31 although the group reported no specific figures in its business update.

The group’s subsidiaries were said to have reported a “modest increase” in operating profit. During the period, the group’s health and beauty, as well as convenience divisions, saw “strong recovery” although that was offset by lower results in the grocery retail division as consumer buying patterns normalised.

4. $FIRST RESOURCES LIMITED(EB5.SI)$

First Resources has an ROCE of 26%. That's a fantastic return and not only that, it outpaces the average of 12% earned by companies in a similar industry.

First Resources' ROCE growth is quite impressive. More specifically, while the company has kept capital employed relatively flat over the last five years, the ROCE has climbed 83% in that same time. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking.

5. $SINGAPORE AIRLINES LTD(C6L.SI)$

Shares of Singapore Airlines soared to their highest levels in more than three years on Wednesday (May 17), as the national carrier emerged from the woes of the COVID-19 pandemic to deliver a record annual profit.

The stock rose as high as S$6.08 in early trade before giving up some gains to finish at S$6.01, up 1.52% or S$0.09 for the day. This marks the counter's highest level since February 2020.

After the market closed on Tuesday, SIA reported a net profit of S$2.16 billion (US$1.63 billion) for the year ended Mar 31, rebounding from a loss of S$962 million a year earlier.