• There are nearly 200 companies listed on SGX that have a market cap range of S$100 million to slightly above S$2 billion. Based on classifications by the FTSE ST Index series, these stocks fall into the small-cap category.
  • Within this universe of 200 small-cap stocks, more than 30 of them derive 50% and above of group revenues from China. They are categorised to the Real Estate, Consumer, Industrials, Materials, IT, Utilities, Energy, Health Care, and Financial sectors.
  • Among these small-cap China plays, the five best performers are: Techcomp (+143.9%), Delong (+115.1%), China Sunsine Chemical (+76.2%), Weiye (+40.2%), and Memtech International (+33.5%). They have averaged a total return of 81.8% in the YTD, bringing their 12-month and three-year average total returns to 122.9% and 252.5% respectively.

The FTSE ST Index series classifies small-cap stocks that trade on SGX as those with a market capitalisation ranging from S$100 million to slightly above S$2 billion. Beyond the 65 constituents of the FTSE ST Small Cap Index, there are nearly 200 small-cap stocks on SGX that fall within this market cap range.

Within this universe of 200 small-cap stocks, more than 30 of them derive 50% and above of group revenues from the People’s Republic of China. They are categorised to the following sectors: nine in Real Estate, four in Consumer Staples, four in Industrials, four in Materials, three in Consumer Discretionary, three in Information Technology, three in Utilities, two in Energy, two in Health Care, and one in Financial. Among the nine classified to the Real Estate segment, four are developers and the rest are Real Estate Investment Trusts (REITs).

Among these small-cap China plays, the five best performers are: Techcomp (+143.9%), Delong (+115.1%), China Sunsine Chemical (+76.2%), Weiye (+40.2%), and Memtech International (+33.5%). These five have averaged a total return of 81.8% in the 2018 year-to-date, bringing their 12-month and three-year average total returns to 122.9% and 252.5% respectively.

China’s Slower Growth Momentum

China’s gross domestic product (GDP) expanded 6.7% YoY in the April-June quarter, growing at the slowest pace since 2016 and down slightly QoQ. Retail sales increased by a better-than-expected 9% YoY in June, but industrial output slowed to a 6% rise. While fixed-asset investment gained 6% over the first half of the year, the pace was slower than through the end of May.

The weakening in the world’s second-largest economy comes amidst an escalating trade war with the US, and many economists are concerned this could have knock-on effects on global growth.

The International Monetary Fund (IMF) said in a Country Focus report published on 26 July that the Chinese economy continues to perform strongly, with growth expected at 6.6% this year, down marginally from last year’s 6.9%. The IMF praised China’s progress on reducing financial sector risks, but noted that credit growth was still unsustainably high, and some aspects of the country’s rebalancing had slowed. The report stressed the importance of staying the course on reining in credit growth, noting that the tightening of macro-financial policies should continue, while de-emphasising growth targets. (Click here for the full report)

The tables below detail the small-capped stocks on SGX with annual revenue exposure of 50% and above to China, sorted by YTD total returns. Click on the stock name to view its profile in StockFacts.

Name SGX Code Market Cap S$M 30 July Closing Price Total Return YTD % Total Return 1 Year % Total Return 3 Years % China Geo Seg Rev %^
Techcomp Hldgs T43 151 0.550 143.9 173.1 117.6 73.1
Delong Hldgs BQO 628 5.700 115.1 295.8 551.4 99.7
China Sunsine Chemical Hldgs CH8 767 1.560 76.2 85.4 384.8 68.7
Weiye Hldgs BMA 127 0.645 40.2 17.3 57.3 96.9
Memtech Intl BOL 192 1.370 33.5 42.8 151.3 80.7
Lung Kee Bermuda Hldgs** L09 452 0.715 27.8 32.6 N/A 87.1
Sunpower Group 5GD 417 0.565 25.8 -18.0 132.2 92.2
Kingboard Copper Foil Hldgs K14 332 0.460 22.7 29.6 177.1 100.0
Tat Seng Packaging Group T12 119 0.760 5.4 13.1 180.4 93.2
Dasin Retail Trust CEDU 486 0.875 4.2 18.8 N/A 100.0
First Sponsor Group ADN 856 1.320 4.0 8.2 17.8 92.2
Sino Grandness Food Industry T4B 201 0.205 3.0 -8.9 -31.3 85.2
Best World Intl CGN 725 1.320 1.8 -10.2 1,553.3 50.0
BHG Retail REIT BMGU 364 0.725 1.4 5.8 N/A 100.0
Hotung Investment Hldgs BLS 177 1.840 0.4 -12.4 71.7 83.9
Sasseur REIT CRPU 885 0.750 N/A N/A N/A 100.0
Elec & Eltek Intl Co* E16 371 1.460 -1.0 -7.7 94.2 59.9
EC World REIT BWCU 564 0.715 -2.1 -0.9 N/A 100.0
CapitaLand Retail China Trust AU8U 1,523 1.570 -2.6 1.5 18.3 100.0
Fu Yu Corp F13 130 0.173 -3.1 -8.8 17.0 50.8
Straco Corp S85 680 0.790 -4.1 -2.9 -9.8 67.9
China Everbright Water U9E 1,087 0.410 -4.6 -14.5 -47.8 100.0
Zhongmin Baihui Retail Group 5SR 163 0.850 -9.0 -16.1 -49.6 100.0
China Jinjiang Environment Hldgs BWM 797 0.555 -10.5 -25.3 N/A 98.8
Sinostar PEC Hldgs C9Q 122 0.190 -11.4 -2.6 61.0 100.0
Bund Center Investment BTE 489 0.645 -12.8 -16.2 -11.4 100.0
OUE Lippo Healthcare 5WA 240 0.108 -13.6 6.9 -65.2 61.7
CITIC Envirotech CEE 1,504 0.625 -14.3 -14.3 -23.4 97.4
Geo Energy Resources RE4 299 0.225 -15.1 1.5 17.5 90.7
The Place Hldgs E27 188 0.032 -17.9 -11.1 -3.0 100.0
Ying Li Intl Real Estate 5DM 307 0.120 -20.5 -14.3 -35.5 100.0
Oceanus Group 579 146 0.006 -25.0 -33.3 -40.0 85.0
Hi-P Intl H17 1,086 1.350 -25.8 57.5 230.1 58.8
SIIC Environment Hldgs BHK 991 0.380 -26.2 -20.8 -55.0 100.0
Hanwell Hldgs DM0 119 0.215 -29.9 -37.0 -11.6 56.7
Name SGX Code Market Cap S$M 30 July Closing Price P/E (x) Dvd Ind Yld % GICS Sector
Techcomp Hldgs T43 151 0.550 84.2 N/A Health Care
Delong Hldgs BQO 628 5.700 1.5 N/A Materials
China Sunsine Chemical Hldgs CH8 767 1.560 8.1 1.9 Materials
Weiye Hldgs BMA 127 0.645 5.4 N/A Real Estate
Memtech Intl BOL 192 1.370 10.5 4.1 Information Technology
Lung Kee Bermuda Hldgs** L09 452 0.715 N/A 6.7 Industrials
Sunpower Group 5GD 417 0.565 8.6 0.2 Industrials
Kingboard Copper Foil Hldgs K14 332 0.460 121.1 N/A Materials
Tat Seng Packaging Group T12 119 0.760 5.9 4.0 Materials
Dasin Retail Trust CEDU 486 0.875 15.5 8.2 Real Estate
First Sponsor Group ADN 856 1.320 9.5 1.6 Real Estate
Sino Grandness Food Industry T4B 201 0.205 2.8 N/A Consumer Staples
Best World Intl CGN 725 1.320 13.7 3.1 Consumer Staples
BHG Retail REIT BMGU 364 0.725 17.1 7.5 Real Estate
Hotung Investment Hldgs BLS 177 1.840 10.7 8.3 Financials
Sasseur REIT CRPU 885 0.750 14.5 N/A Real Estate
Elec & Eltek Intl Co* E16 371 1.460 7.9 5.5 Information Technology
EC World REIT BWCU 564 0.715 12.2 8.3 Real Estate
CapitaLand Retail China Trust AU8U 1,523 1.570 9.9 6.5 Real Estate
Fu Yu Corp F13 130 0.173 28.3 8.7 Industrials
Straco Corp S85 680 0.790 16.1 3.2 Consumer Discretionary
China Everbright Water U9E 1,087 0.410 10.7 1.2 Utilities
Zhongmin Baihui Retail Group 5SR 163 0.850 14.5 1.7 Consumer Discretionary
China Jinjiang Environment Hldgs BWM 797 0.555 5.6 8.9 Utilities
Sinostar PEC Hldgs C9Q 122 0.190 9.1 2.6 Energy
Bund Center Investment BTE 489 0.645 17.1 3.1 Real Estate
OUE Lippo Healthcare 5WA 240 0.108 N/A N/A Health Care
CITIC Envirotech CEE 1,504 0.625 11.0 2.4 Industrials
Geo Energy Resources RE4 299 0.225 7.1 4.5 Energy
The Place Hldgs E27 188 0.032 N/A N/A Consumer Discretionary
Ying Li Intl Real Estate 5DM 307 0.120 5.2 N/A Real Estate
Oceanus Group 579 146 0.006 1.9 N/A Consumer Staples
Hi-P Intl H17 1,086 1.350 8.9 18.5 Information Technology
SIIC Environment Hldgs BHK 991 0.380 9.7 N/A Utilities
Hanwell Hldgs DM0 119 0.215 10.2 1.2 Consumer Staples

Source: Bloomberg & SGX StockFacts (data as of 30 July 2018).

*Note: Elec & Eltek is traded in USD with SGD equivalents shown in table.

**Note: For Lung Kee, the following periods were used to calculate its YTD and 1Y total returns: 23 Nov 2017-19 June 2018 and 27 June 2017-19 June 2018; 3Y total return data unavailable due to low trading volume.

^Note: Data from latest annual report

This article was originally published on SGX.

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