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SI Research: 2 More Stocks to Benefit from China’s Real Consumption Power
Aspire, Hot Picks | 27 November 2015
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By: Raymond Leung
Articles (142) Profile

It wasn’t long ago since Chinese billionaire and founder of Alibaba Group, Jack Ma, claimed that Chinese consumers will be driving the economy. His point was proven when his company achieved sales of US$14.3 billion on “Singles Day” (11/11).

How significant is this? Let’s compare some figures: The GDP of Iceland last year was only US$17 billion while Singapore’s GDP was 22 times of the sales figure. About a month ago, we covered three shares that will benefit from the Chinese consumers here. In this article, we will cover another two stocks listed in Singapore that can benefit from China’s retail consumption and the rising trend of e-commerce.

1. CapitaLand Retail China Trust

CapitaLand Retail China Trust (CRCT) is Singapore’s first and only REIT focusing on China shopping malls. As the Chinese economy pins its hope on the purchasing power of its people, shopping power is expected to increase. CRCT has a portfolio of ten malls with a total annual shopper traffic of 89.8 million for 2014.

Analysts from DBS Vickers Research gave CRCT a “Buy” call with a potential upside of 10.2 percent.

2. Singapore Post

There is no stopping of the rise in e-commerce globally, as the spending power of the millennials increase. Singapore Post (SPOST) will be the best company listed on SGX to get such exposure. In recent years, the company has been aggressively expanding its presence in e-commerce.

Besides the traditional parcel delivery, SPOST is involved in being an end-to-end provider of e-commerce in Asia Pacific region; from managing the website to the delivery of goods. Last year, revenue for e-commerce in SPOST grew 18.9 percent year-on-year (YoY) and constitutes 28 percent of SPOST’s total revenue.

Alibaba began investing in SPOST last year and has increased its investment this year. The close relationship between the two companies allowed them to work closely in projects with more to come in the future. Thus, SPOST is in a good position to ride of the growth of Alibaba.

Analysts from OCBC Research gave SPOST a “Buy” call with a price target of $2.19.

Trained in fund management, Raymond is familiar with shares and various investment vehicles.

Please click here for more information about this author.

CapitaLand Retail China Trust  1.520 -0.010 -0.65%   
Business: Co is a real estate investment trust with a portfolio of retail real estate across China.

Insight: Apr-19, 1Q19 gross revenue increased 1.1% in SGD t... Read More
Singapore Post  0.940 -0.005 -0.53%   
Business: [FY19 Turnover] Post and Parcel (47.8%), logistics (31%), eCommerce (15.5%), property (5.7%).

Insight: May-19, FY19 revenue rose 2.9% to $1.6b largely du... Read More

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