Top Singapore Small Cap Companies - RHB Invest 2020-05-14: 20 Jewels 2020 Edition

20 Jewels 2020 - Top Singapore Small Cap Companies - RHB Invest | SGinvestors.io ALLIANCE HEALTHCARE GROUP LTD (SGX:MIJ) AVI-TECH ELECTRONICS LIMITED (SGX:BKY) BRC ASIA LIMITED (SGX:BEC) CHINA AVIATION OIL(S) CORP LTD (SGX:G92) CSE GLOBAL LTD (SGX:544) FRENCKEN GROUP LIMITED (SGX:E28) FU YU CORPORATION LTD (SGX:F13) GKE CORPORATION LIMITED (SGX:595) IREIT GLOBAL (SGX:UD1U) JAPFA LTD. (SGX:UD2) KEPPEL PACIFIC OAK US REIT (SGX:CMOU) KOUFU GROUP LIMITED (SGX:VL6) MARCO POLO MARINE LTD. (SGX:5LY) OXLEY HOLDINGS LIMITED (SGX:5UX) PAN-UNITED CORPORATION LTD (SGX:P52) PARKWAYLIFE REIT (SGX:C2PU) QAF LTD (SGX:Q01) UG HEALTHCARE CORPORATION LTD (SGX:41A) UMS HOLDINGS LIMITED (SGX:558) YONGNAM HOLDINGS LIMITED (SGX:AXB)

Top Singapore Small Cap Companies - 20 Jewels 2020 Edition

  • We celebrate the 10th edition of the Singapore Small Cap Jewels in 2020.
  • This year, we face an unprecedented situation, with the spread of COVID-19 causing lockdowns in countries around the world and the crash in oil prices. These has caused a steep correction across global markets last seen only during the Global Financial Crisis, as well as aggressive fiscal and monetary policy measures to counter the global slowdown arising from these events.
  • The steep corrections have caused many opportunities to unfold in the small-mid cap space as these companies have corrected more aggressively, as compared to their larger cap peers. Some we have identified have strong balance sheets with a big percentage of net cash over market capitalisation, as well as attractive yields to tide one through these dark days. We have focused our attention mainly on fundamentally solid companies in several different sectors which are likely to be able to ride through this crisis and even possibly emerge stronger than their industry peers.
  • Over 55% of our stock picks in this book are new companies not seen in previous editions. This year, Technology and Manufacturing names makes up a sizable portion of our Top 20 picks, as many of these picks have strong net cash balance sheets to tide them through, accompanied with generous yields. The semi-conductor industry is still expected to recover in the latter part of 2020 despite the global slowdown, and we have picked some names in this space that will benefit from this recovery.
  • With the REITs and business trusts correcting significantly over the last two weeks by about 30-50% from their peaks, we identified some whose yields reflect attractive risk-reward at these levels. While other companies featured in this edition may vary in terms of business, market capitalisation and investor interest, they share a common DNA – they are fundamentally sound companies with a great probability of making good returns for investors. We hope to eventually see these companies graduate into mid-sized corporates or even large caps in the not too distant future.



RHB's Singapore 20 Jewels 2020 Edition


Company Name Target Price Mkt Cap P/E (x) P/B (x) Div Yield (%) ROE (%)
(S$mil) FY19 FY20F FY19 FY20F FY19 FY20F FY19 FY20F
Alliance Healthcare (SGX:MIJ) N/A 41 18.3 N/A 2.5 N/A N/A N/A 6.6 N/A
Avi-Tech Electronics (SGX:BKY) S$0.50 63 13.6 10.4 1.3 1.2 6.2 6.8 9.5 12.1
BRC Asia (SGX:BEC) N/A 246 8.1 N/A 1.0 N/A 7.3 N/A 12.6 N/A
China Aviation Oil (SGX:G92) S$1.25 869 6.3 8.8 0.8 0.7 4.5 4.5 12.4 8.4
CSE Global (SGX:544) S$0.54 202 7.5 8.7 1.1 1.1 7.0 7.0 13.7 12.4
Frencken Group (SGX:E28) S$0.90 314 6.7 7.8 1.1 1.0 4.1 3.9 14.4 12.4
Fu Yu Corp (SGX:F13) S$0.28 173 9.5 10.3 1.1 1.0 7.0 7.0 11.2 9.8
GKE Corp (SGX:595) N/A 43 N/A N/A 0.6 N/A N/A N/A -3.0 N/A
IREIT Global (SGX:UD1U) S$0.83 416 6.1 19.6 0.8 0.8 8.5 8.7 19.4 8.3
Japfa (SGX:UD2) N/A 1,178 6.3 N/A 0.9 N/A 1.8 N/A 13.6 N/A
Keppel Pacific Oak US REIT (SGX:CMOU) US$0.76 845 8.6 11.0 0.8 0.8 9.4 9.2 12.0 7.3
Koufu (SGX:VL6) N/A 341 12.3 N/A 3.2 N/A 4.1 N/A 27.1 N/A
MarcoPolo Marine (SGX:5LY) N/A 46 N/A N/A 0.4 N/A N/A N/A -2.3 N/A
Oxley Holdings (SGX:5UX) S$0.31 968 6.4 8.2 0.6 0.6 4.3 6.5 9.5 7.5
Pan United (SGX:P52) N/A 200 9.7 N/A 1.0 N/A 5.6 N/A 10.6 N/A
Parkway Life REIT (SGX:C2PU) N/A 1,997 16.2 N/A 1.7 N/A 4.0 N/A 11.2 N/A
QAF (SGX:Q01) N/A 472 23.3 N/A 0.9 N/A 6.1 N/A 4.0 N/A
UG Healthcare (SGX:41A) S$0.33 48 18.9 9.5 1.1 1.0 1.1 1.3 5.9 11.2
UMS Holdings (SGX:558) N/A 437 13.1 N/A 1.8 N/A 4.9 N/A 9.2 N/A
Yongnam (SGX:AXB) N/A 44 N/A N/A 0.2 N/A N/A N/A -14.7 N/A

Note: All prices as at 30 April 2020, N/A = not available
Source: Bloomberg, RHB


See attached 54-page PDF report for complete analysis.


See also RHB's 20 Jewels 2019 - Top Singapore Small Cap Companies 2019 Edition.





Jarick Seet RHB Securities Research | RHB Singapore Research Team RHB Invest | https://www.rhbinvest.com.sg/ 2020-05-14
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