- 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 %^|
|China Sunsine Chemical Hldgs||CH8||767||1.560||76.2||85.4||384.8||68.7|
|Lung Kee Bermuda Hldgs**||L09||452||0.715||27.8||32.6||N/A||87.1|
|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|
|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|
|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|
|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|
|SIIC Environment Hldgs||BHK||991||0.380||-26.2||-20.8||-55.0||100.0|
|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|
|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|
|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|
|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.