Ever thought of healthcare as an investment? Healthcare stocks can form an integral part of one’s portfolio for its 1) resilient earnings; and 2) potential organic earnings growth due to healthcare cost inflation. In Singapore, there are 2 fundamental trends that define the upside of the healthcare industry. 1) Aging Population and Longer Life Expectancy During 2005, population in Singapore that are aged 65 and above was 270,000. That number has close to double to 440,000 in 2015 and is expected to reach 900,000 by 2030. With the advancement of medical technologies, life expectancy of Singapore citizens has also increased to 82.9 years based on the latest numbers provided by Singstat. Furthermore, statistical studies by Ministry of Health have also shown that the number of hospital admission increases with age. 2) Higher Earning Power According to the numbers provided by the Ministry of Manpower, the median gross monthly income for Singapore residents has grown consistently over the years. With increasing income and insurance policies covering private hospitalisation expenses, those seeking medical attention may likely turn to private sources for more personalised services and shorter waiting time. [caption id="attachment_11983" align="aligncenter" width="693"] Source: http://stats.mom.gov.sg In addition, Singapore is ranked as the 4th healthiest country based on the 2017 Bloomberg Global Health Index. Apart from local spending, this is a pull factor for wealthy individuals around the Asian region to choose Singapore as a potential medical destination. Over the past 5 years, the...
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Croesus Retail Q3 2017 Earnings Update For this week, I will be posting an earnings update on Croesus Retail Trust (CRT), which announced their third quarter earnings. CRT is the first Asia Pacific retail business trust listed on SGX with an initial focus in Japan. Currently their portfolio of core assets are derived there but with a long term focus on pursuing development or acquisition opportunities in the Asia Pacific region. The latest developments on their earnings are: 3Q YTD Gross Revenue increased 35% from 6,906mil to 9,326mil (JPY) 3Q YTD Net Property Income increased 22% from 4,009mil to 4,892mil (JPY) 3Q YTD DPU grew 9.9% from 5.14 cents to 5.65 cents (SGD) Occupancy stands 97.7% Weighted Average Lease Expiry of 6.5 years Cost of Debt reduced from 1.90% to 1.68% Following an announcement on 26 April 2017 on a potential acquisition of issued units in CRT, its share price has traded upwards from $0.94 to a high of $1.02. While discussions are still preliminary, I would encourage investors not to speculate but stick to the fundamentals. In my personal opinion, CRT has been strong on 3 fronts:1) Ability to drive acquisition and maintaining a high occupancy rate for their portfolio.2) Consistently grow their distribution per unit. 3) Sound hedging strategy to eliminate uncertainty on their currency. Comparison of Retail REITs When you step foot into a shopping mall, have your ever wonder whether it is owned by a listed...
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Consumer staples companies have always form a resilient part of one’s portfolio. Today, I will be giving an update on Sheng Siong latest earnings and insights which investors should be aware of when you are investing into this company. Based on the earnings reported last Thursday, Sheng Siong has: 1) Grown its 3Q Revenue by 6.8% YOY 2) Improved its Gross Profit Margin by 50 basis points 3) Grown its 3Q Net Profit by 6.1% YOY 4) Retail Area contracted by 1.8%, due to closing of "The Verge Mall" 5) Lower dividend to 1.55 cents, compared to 1.9 cents a year ago. With no earnings surprises, what could potentially be the factors affecting the shares during a period when STI has climbed to its year high? While there is no certainty what attributed to the drop the last few days, investors should be aware of 2 key events. 1) Intensified competition by E-Commerce companies By now you should have heard of “Amazon Prime”, which has launched as an e-shopping platform in Singapore. This new service allows consumers to make purchase via the App (downloadable from iTunes or Play Store) and it is possible for the items be delivered to you on the same day. While they are not the first, as others like Honestbee or Redmart provide such services as well. Having a new entrant to the sector, we might see discount tactics among players to preserve or grow market...
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The internet has formed an integral part of our lives, ranging from personal entertainment to business needs. In this week’s article, I will be sharing some information and my personal opinion on Singapore largest IPO since 2013 – Netlink NBN Trust. Netlink is the foundation of Singapore’s Next Generation Broadband Network, which supplies high speed internet across mainland Singapore and its connecting islands. In simpler terms, this company installs and supply high speed fibre networks to residential homes and others. 1) Business Model and Breakdown Revenue [caption id="attachment_11983" align="aligncenter" width="693"] Source: Preliminary Prospectus for Netlink IPO From the forecasted earnings for 2018, 68% of the revenue is derived from residential connections and non-residential connections. While Netlink doesn’t maintain a direct relationship with end-users, this revenue is generated through the requesting licensees, which are our telecommunication companies. For the usage of the fibre connection, these licensees (Singtel, M1, Starhub, MyRepublic, etc) will need to pay a recurring connection fee to Netlink. Other main revenue contribution also includes one-off installation revenue, ducts and manhole revenue as well as leasing of their Central Office for others to house their network equipment. 2) Growth Prospects [caption id="attachment_11983" align="aligncenter" width="693"] [caption id="attachment_11983" align="aligncenter" width="693"] Source: Preliminary Prospectus for Netlink IPO, complied by MPA Recurring revenue from the subscription of fibre connection is perhaps the most attractive part of this business. Looking into the 2 biggest revenue segments, both present a good growth story. Residential -...
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