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SGX’s 10 Largest Capitalised Growth Stocks
Perspective | 29 October 2013
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This article is written by Geoff Howie from the Singapore Exchange (SGX). Geoff is widely known for providing insightful investment analysis and this article is republished with permission from SGX My Gateway.

1. Growth stocks focus on consistent, higher than industry average income growth rather than high, steady dividend payouts.

2. More than 30 of SGX-listed stocks are considered growth stocks.

3. The 10 largest capitalised growth stocks have averaged a 26.9 percent year-to-date price gain while the median counter rose 30.2 percent.

Growth stocks are companies that seek consistent, higher than industry average growth in income and prefer to retain earnings to reinvest into the company rather than pay out dividends. In defining growth stocks, investor guides generally note the potential capital appreciation rather than the steady income that a stock offers through dividends or distribution.

Consequently, growth companies have two common attributes: consistent income growth and a low dividend payout ratio. This contrasts with dividend stocks, which are companies that have a history of relatively high dividend payout ratios. Real estate investment trusts (REITs) and large mature counters such as the telecommunication stocks are some examples of dividend stocks listed on Singapore Exchange (SGX).

Hence, growth stocks are usually associated with small cap stocks given the potential growth of their size. However, blue chip or mid-cap stocks that produce consistent income growth, even through economic troughs, may also be categorised as growth stocks. While there are no official numerical criteria to define growth stocks, growth stocks in this Market Update are defined as counters that have had three consistent financial years of income growth and a dividend payout ratio of less than 25 percent in the latest fiscal year.

There are 32 companies listed on SGX that meet these criteria and the 10 largest growth stocks by market capitalisation are detailed below. These 10 counters are involved in a variety of industries (as defined by the Industrial Classification Benchmark) with four classed as Consumer Goods stocks, two classed as Oil & Gas stocks and one each from the Utilities, Industrials, Financials and Consumer Services industries.

Price performances of the ten counters varied from a 99.9 percent gain for Sarin Technology to a 10.9 percent decline for Yeo Hiap Seng in 2013 in the year to date as of 23 October. They averaged a 26.9 percent price gain while the median counter saw a 30.2 percent gain.

Source: Bloomberg (as of 23 October 2013), *denotes STI constituent, ^listed on GlobalQuote

Thai Beverage is the largest market capitalised counter on the list. It is also a constituent of the benchmark Straits Times Index (STI). The company produces and distributes spirits, beer, non-alcoholic beverages and food in Thailand and rest of Asia. Since the end of 2012, Thai Beverage’s price has gained 35.4 percent as of 23 October. After taking dividends into account, the company offers the second highest total return of 39.8 percent in the same period.

Genting Hong Kong is the second largest counter on the list of growth stocks and is currently listed on GlobalQuote. The investment holding company engages in cruise operations and also operates Resorts World Manila, an integrated leisure and entertainment complex in the Philippines. Genting Hong Kong’s stock price has increased 27.8 percent in the October 23 year-to-date period.

First Resources is the third largest capitalised counter on the list. The group listed in December 2007 on SGX, and is primarily involved in the production and processing of crude palm oil. The Indonesia-based group owns more than 146,000 hectares of oil palm plantations and 11 palm oil mills that produce up to 3.78 million tonnes of fresh fruits per year. First Resources is one of the three laggards on the list with a price decline of 6.44% since the end of 2012. However, the group has produced an annualised total return of 17.6% over the past three years.

Thai Beverage Public Co  0.875 -- --   
Business: [FY18 Turnover] Spirits (46.1%), beer (41.1%), non-alcoholic beverages (7%), food (5.8%).

Insight: May-19, 1H19 revenue rose 26.1% to THB142.6b mainl... Read More
Genting Singapore  0.920 -- --   
Business: Develops, operates & mkts casinos & IRs globally, including Australia, M'sia, Philippines & UK. [FY18 Turnover] Gaming (66.1%), non-gaming (33.8%), others & invs (0.1%).

Insight: May-19, 1Q19, despite Co's non-gaming business reg... Read More
First Resources  1.590 +0.050 +3.25%   
Business: Co engages in the cultivation and maintenance of oil palm plantations. [FY18 Turnover] Refinery and processing (95.5%), plantations & palm oil mill (4.5%).

Insight: Feb-19, FY18 revenue dipped 2.1% due to lower aver... Read More
Ezion Hldgs  -- -- --   
Business: Co develops, owns, and charters offshore assets to support the offshore energy markets. [FY17 Turnover] Liftboats (49.7%), Jack-up Rigs (39.5%), Offshore Support Logistic Services (10.8%).

Insight: Aug-18, 1H18, Co returned to the black with a net ... Read More
Yeo Hiap Seng  0.885 -0.005 -0.56%   
Business: Co engages in mfg & distribution of food & beverages. [FY17 Turnover] Consumer F&B pdts (99.9%), other investments (0.1%)

Insight: Aug-18, 1H18 revenue rose 8.8% to $183.9m due to h... Read More
Ying Li Int'l Real Estate  0.099 -- --   
Business: Property developer based in Chongqing. [FY18 Turnover] Property development (74.6%), property investment (25.4%).

Insight: May-19, 1Q19 revenue fell 53.8% to Rmb143m attribu... Read More
China Aviation Oil  1.210 -- --   
Business: Co engages in trading jet fuel and other petroleum products. [FY18 Turnover] Middle distillates (59.9%), other oil products (40.1%).

Insight: Feb-19, FY18 net profit increased 10.5% mainly att... Read More
Sarine Technologies  0.245 +0.010 +4.26%   
Business: Co manufactures & sells precision technology products for the processing of diamonds & gemstones. [FY18 Geographical] India (66.5%), Africa (12%), others (10%), Israel (5.8%), Europe (3.9%) and North America (1.8%).

Insight: May-19, 1Q19 revenue decreased by US$5.7m to US$10... Read More

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