• Venture, AEM, UMS, ISDN and Frencken rank among Singapore’s 50 most traded stocks in 2021 YTD, while averaging 40% total returns. In August, ISDN reported its highest semi-annual net profit, UMS noted its 1HFY revenue surpassed S$100 million mark for the first time, and AEM reported its second highest 1HFY on record. 
   
• The five stocks all have a 10-year trading history, generating similar performances to global technology benchmarks, with average annualised total returns ranging from 16% for Venture to 55% for AEM. By comparison, global technology benchmarks generated 23% average annualised total returns over the 10 years. 
   
• The five stocks saw their combined market value triple over the 10 years, from S$2.9 billion to S$8.8 billion. AEM saw the greatest increase in its market value growing from $20 million to S$1.1 billion, on the back of its share price gaining from 6 cents to near S$4.00. 
   
• Nanofilm also ranks among the current top 50 most traded stocks in 2021, and generated 70% gains since its debut in October 2020. While Nanofilm, Venture, AEM, UMS, ISDN and Frencken make up just 1% of the combined market value of all stocks listed in Singapore, the six stocks have been recipient to 5% of the daily trading turnover in 2021.

The past 10 years have seen global technology indices generate 23% average annualised total returns on the back of significant technological advancements and increasing global demand. Back in 2011, Apple introduced iPads, global corporates embraced cloud computing and Singapore’s largest technology stocks by market value were Venture Corporation, Stats ChipPAC and Silverlake Axis. Venture Corporation remains the largest Technology stock listed in Singapore by market value, in addition to the most traded Technology stock listed in Singapore so far in 2021. Stats ChipPAC was acquired in 2015 by JCET-SC (Singapore) Pte Ltd, while Silverlake Axis has since generated a 4% annualised total return through to 25 August.

Back in 2011, AEM Holdings reported a FY10 (ended 31 Dec) profit before tax of S$3.9 million, with its market capitalisation in the vicinity of S$20 million. For its FY20, AEM Holdings reported profit before tax of S$113.8 million, which represented a close to 30-fold increase over the FY10 result. At the same time, the market capitalisation of the company grew more than 50-fold, with average annualised total returns of 55% in the 10 year period through to 25 August.

The comparative returns of Singapore’s five most traded stocks, with a 10 year trading history, that provide technology and integrated precision products, services and solutions are illustrated below. Three of the stocks, AEM Holdings, UMS Holdings, and Frencken Group have outpaced the global technology benchmark indices, whilst ISDN Holdings and Venture Corporation lagged the benchmarks, despite both stocks generating respective annualised total returns of 19% and 16% respectively.

Note that such returns illustrated above are considered exponential, peripheral or outlier, and the key fact that past performances do NOT guarantee future performances needs to be reiterated. With a 30% weightage, the performance of global technology stocks has had a significant impact on the performance of the S&P 500 Index, which compares to a 2% technology weightage for the regional FTSE ASEAN All-Share Index.

The detailed performances of the five most traded technology-related stocks listed in Singapore that have listed for the full duration of the past 10 years are tabled below.

 Source: SGX, Refinitiv, Bloomberg (Data as of 25 August 2021)
 

Note two of these stocks, ISDN Holdings and Frencken Group have been traditionally categorised as Industrials rather Technology stocks. As KGI noted in a July company update, ISDN Holdings group revenue breakdown by end industries is mainly dominated by the Industrial Robotic and Electronic & Semiconductor industry. CGS-CIMB also highlighted in a recent company update that Frencken Group’s semiconductor segment saw revenue growth of 60% YoY to S$141 million and accounted for 38% of its 1HFY21 (ended 30 June) group turnover. 

For the five stocks’ recent earnings reports:
 

• Venture reported back on 6 August, 1HFY21 (ended 30 June) net profit of S$140.4 million (up 4.9% YoY) on revenue of S$1.4 billion (up 7.6% YoY) with a net cash position of S$922.2 million as of 30 June.
• AEM reported on 5 August that 1HFY21 (ended 30 June) revenue at S$192 million, its second highest 1HFY after the record breaking 1HFY20, and kept its FY21 revenue guidance at S$460 million to S$520 million (FY20 Revenue S$519 million, FY19 Revenue S$323 million, FY18 revenue S$262 million). AEM Holdings also announced it is raising $103.1 million in a private placement to Temasek, with 26.8 million new ordinary shares at an issue price of S$3.8477 per share (representing 9.5% of the total number of issued shares).
• UMS Holdings reported after the 13 August close that its 1HFY21 (ended 30 June) revenue surged 55% to S$116m, surpassing the S$100 million mark for the first time in Group’s history with 1HFY21 net profit increasing 53% to S$34.3 million, attributed to strong equipment spending and capex commitments from global foundries and the build-up of semiconductor production infrastructure.
• ISDN reported after the 12 Aug close both a new revenue and profit record, with 1HFY21 (ended 30 June) revenue up +30% YoY to S$217.2 million and profit after tax up +51% YoY to S$19.4 million. During 1HFY21, ISDN continued its strategic buildout by expanding its solutions portfolio, including expanding industrial IoT connectivity, deepening advanced engineering, growing industrial systems projects, and advancing its software and cloud solutions.
• Frencken Group reported after the 12 Aug close, 1HFY21 (ended 30 June) PATMI of $31.3 million, an increase of 67.2% YoY, attributed to the continued strength of the semiconductor industry, recovery of certain business segments affected by the COVID outbreak in 1HFY20, as well as the Group’s continual efforts to engage customers.

Nanofilm Technologies International currently ranks as the 33rd most traded Singapore-listed stock in 2021, however as the stock was listed relatively recently in October 2020, it is not included in the 10-year comparatives above. In the 2021 year to 25 August, Nanofilm Technologies International has generated a 0.2% price gain, taking its return since from the initial offering price to 70%.

On 18 August, Nanofilm Technologies International filed a general announcement addressing market feedback and its management bench strength post its 1HFY21 (ended 30 June) results released 13 August.