Weekly | Why Seatrium Lead the Market this Week?
As of the close on Friday, $Straits Times Index(STI.SI)$ closed at 3,801.83 points, up 0.80% points last week.
During the last 5 trading days, $Seatrium Ltd(5E2.SI)$, $t PTTEP TH SDR(TPED.SI)$, $Shangri-La HKD(S07.SI)$, $SingPost(S08.SI)$ and $Sri Trang Agro(NC2.SI)$ are the top 5 weekly gainers, up 7.35%, 6.70%, 5.85%, 5.71% and 4.48% respectively.
$Delta TH SDR 1to1(TDED.SI)$, $BYD HK SDR 10to1(HYDD.SI)$, $Alibaba HK SDR 5to1(HBBD.SI)$, $TJ DaRenTang USD(T14.SI)$ and $Bank of CN HK SDR 1to1(HBND.SI)$ are top 5 decliners of SGX stocks which market capital above S$1 Bln.
Below are key analyses of the TOP 5 gainers:
1. $Seatrium Ltd(5E2.SI)$
Major Contract Acquisition: The company secured a significant engineering, procurement, construction, and commissioning (EPCC) contract for BP's Kaskida project in the Gulf of Mexico, valued between S$500–600 million. This addition bolsters Seatrium's robust order book, which stood at S$24.4 billion at the end of Q3 2024, with project deliveries scheduled until 2031.
Completion of Low-Margin Contracts: Seatrium has completed several low-margin legacy contracts, particularly in the U.S., which had previously impacted its financial performance. The conclusion of these projects is expected to enhance profitability and has been positively received by investors.
Strategic Expansion into the Indian Market: The company signed a memorandum of understanding with Cochin Shipyard, an Indian government enterprise, to jointly design and supply critical equipment for offshore projects. This strategic move positions Seatrium to capitalize on India's projected upstream capital expenditure of US$100 billion by 2030.
2. $t PTTEP TH SDR(TPED.SI)$
Strategic Investment Plans: PTTEP announced a capital expenditure plan of $21.2 billion over the next five years, with $5.3 billion allocated for 2025. This investment aims to enhance core assets in Thailand, Myanmar, Oman, and Malaysia, and to expedite development projects in Abu Dhabi and Mozambique. Such significant investment plans often boost investor confidence, positively impacting stock prices.
Focus on Production Growth: The company projects an increase in petroleum sales from an average of 507,000 barrels of oil equivalent per day (boed) in 2025 to 541,000 boed in 2026. Anticipated production growth can attract investors, leading to a rise in stock value.
Diversification into Clean Energy: PTTEP plans to invest $1.75 billion over five years in wind energy, carbon capture and storage, hydrogen, and corporate venture capital initiatives. This diversification aligns with global trends towards cleaner energy, potentially making the company more attractive to a broader range of investors.
3. $Shangri-La HKD(S07.SI)$
Improved Financial Performance: Shangri-La Asia's earnings per share (EPS) increased from US$0.037 to US$0.041 over the past year, indicating a 13% gain. Additionally, EBIT margins improved by 3.2 percentage points to 9.0%, reflecting enhanced operational efficiency.
Insider Confidence: The Executive Chairman, Hui Kwong Kuok, purchased shares worth HK$11 million at an average price of HK$5.52 per share, signaling strong confidence in the company's prospects.
Analyst Outlook: Analysts forecast a 21.47% annual growth in earnings for Shangri-La Asia, suggesting a positive future outlook.
4. $SingPost(S08.SI)$
Divestment of Australian Business: SingPost announced the sale of its Australian subsidiary, Freight Management Holdings, to Pacific Equity Partners for A$775.9 million (approximately US$505.4 million). This strategic move is expected to yield a gain of S$312.1 million (US$233.1 million) and reflects the company's efforts to streamline operations and focus on core markets.
Potential Special Dividend: Following the divestment, SingPost's board is considering a special dividend payment to shareholders, after assessing the repayment of Australian dollar-denominated borrowing and future funding needs. The prospect of a special dividend often attracts investor interest, contributing to a rise in stock price.
Strategic Refocus: The divestment aligns with SingPost's strategic review initiated in July 2023, indicating a shift towards concentrating on more profitable or core business areas. Such strategic realignments can enhance investor confidence, positively impacting stock performance.
5. $Sri Trang Agro(NC2.SI)$
Strong Financial Performance: In the third quarter of fiscal year 2024, the company reported a profit of THB 517.3 million (approximately $20.03 million), indicating robust operational performance.
Global Demand for Medical Gloves: As a leading manufacturer of medical gloves, Sri Trang Agro has benefited from increased global demand, especially in light of health concerns and the ongoing need for personal protective equipment.
Market Sentiment and Speculation: Positive investor sentiment and market speculation regarding the company's growth prospects may have contributed to the stock's upward movement.
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