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Business Times
4 days ago
- Business
- Business Times
Four ways to identify promising growth stocks
[SINGAPORE] It is an exciting time to be a growth investor, despite the current volatility. Thanks to modern brokerages, it is easier and cheaper than ever to access a wide range of global stocks. With so many options at one's fingertips, the possibilities are vast – but so is the noise. The Internet is flooded with data, opinions and analysis, making it difficult to zero in on truly promising growth stocks. Add the constant barrage of headlines from business news outlets, and it is easy to feel overwhelmed. That is why staying focused is crucial. One needs a reliable strategy to cut through the noise and identify quality growth stocks worth holding for the long term. Here are four effective methods to help you screen for attractive investment opportunities. Strategic review and resets We begin with companies undergoing strategic reviews or resets. These reviews occur when businesses need to reassess their strategic direction. For instance, by trimming unprofitable segments and focusing on high-potential areas, companies can position themselves for sustainable, long-term growth. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Strategic reviews are especially valuable when a company finds itself stagnating and needs to understand what went wrong and how to get back on track. A good example is Hongkong Land. In October 2024, the property developer and investor announced a sweeping strategic review. As part of this move, the company decided to exit the build-to-sell property segment. Instead, it plans to redeploy capital into integrated commercial developments designed to generate steady, recurring income. Its management has set ambitious goals. By 2035, Hongkong Land aims to: Double underlying profit before interest and tax Grow assets under management to US$100 billion (up from US$41 billion as at the end of 2023) Double annual dividend to US$0.44, from US$0.22 in 2023 This strategic reset not only marks a significant change in its business, it also provides clear financial targets for the company's future. Singtel is another company that embarked on a strategic reset starting in May 2021. At the time, Singapore's largest telecommunications provider aimed to seize opportunities in the 5G era, build new growth engines and unlock value from its infrastructure assets. Since then, the mainboard-listed company has kept investors updated on its progress. The telco's transformation strategy has focused on capital recycling and improving its return on invested capital (ROIC), targeting low double-digit ROIC by fiscal 2026. The results are showing. For fiscal 2025, Singtel reported an ROIC of 9.6 per cent, a solid increase of 2.3 percentage points from fiscal 2022. Dividend growth has also been strong and consistent. Since fiscal 2021, when it paid out S$0.075 a share, Singtel has more than doubled its annual dividend to S$0.17 by fiscal 2025. Looking ahead, the telco is gearing up for its next phase: the ST28 strategy. This new initiative emphasises active capital management with the aim of delivering continued growth and even higher dividends. Presence of sustainable trends and catalysts Another effective way to uncover promising growth stocks is by identifying sustainable trends and catalysts that can elevate a business to the next level. One such trend is the rise of athleisure, a blend of athletic and leisurewear. As consumers become more health conscious and lifestyle oriented, demand for stylish, comfortable and easy-to-maintain clothing has surged. This change has fuelled the growth of Lululemon. The company's revenue jumped from US$8.1 billion in fiscal 2023 to US$10.6 billion in fiscal 2025, while net profit more than doubled to US$1.8 billion during the same period. Another powerful trend is the continued expansion of e-commerce, driven by global digitalisation and increasing Internet access. Two standout players in this space are MercadoLibre and Coupang. MercadoLibre, the dominant e-commerce platform in Latin America, is riding a massive wave of growth. The region's e-commerce market is projected to grow at a 19 per cent compound annual growth rate from 2022 to 2027. Over the past three years, its revenue soared from US$10.8 billion in 2022 to US$20.8 billion in 2024, while net profit nearly quadrupled from US$482 million to US$1.9 billion. Coupang, often dubbed the 'Amazon of South Korea', has also seen explosive growth. From 2022 to 2024, revenue surged from US$20.6 billion to US$30.3 billion. After years of investment, it achieved profitability in 2023 with US$1.4 billion in net income. It has remained profitable since. Spotting trends like these and the companies riding them is a powerful way to identify long-term growth opportunities. A large total addressable market Another way to spot promising growth stocks is by focusing on companies with a large total addressable market (TAM). A sizeable TAM gives businesses a long runway for expanding revenue, profits and cash flow, making it a key factor for long-term growth potential. Take ResMed, for example. This medical device company helps people suffering from sleep apnoea and chronic obstructive pulmonary disease. Over the past year, it reached nearly 151 million people with its products. It aims to serve 500 million by 2030. ResMed's long-term opportunity is massive, with a global TAM of 2.3 billion people affected by chronic respiratory conditions. Dexcom is another medical device company with a huge market to tap. It focuses on continuous glucose monitoring (CGM) for people with diabetes. The condition affected almost 590 million people globally in 2024, and is projected to impact more than 850 million by 2050. Dexcom's CGM solutions currently have just 5 per cent penetration among 25 million Type 2 diabetics not on insulin, and less than 1 per cent penetration in the 98 million-strong US prediabetes population. That leaves plenty of room for expansion. Outside of healthcare, Lyft, a US-based ride-hailing company, is making bold moves to expand its market reach. In a recent acquisition, Lyft bought European mobility platform Freenow for around 175 million euros (S$255.5 million), effectively doubling its TAM. The company now has a target market of more than 300 billion personal vehicle trips a year, up from 161 billion before the deal. Successful serial acquirer Investors often steer clear of companies that pursue frequent acquisitions, viewing them as signs of empire-building rather than disciplined growth. But in the right context, particularly when a company holds a strong position in a fragmented industry, serial acquisitions can be a smart and effective growth strategy. When executed well, acquisitions can boost market share and accelerate financial performance. The numbers do not lie; they reveal whether the strategy is paying off. For instance, Hawkins, a speciality chemicals and ingredients company, has been on an acquisition streak – three deals in 2023, four in 2024, and two more in the first four months of 2025. The results speak for themselves. Revenue grew from around US$935 million in fiscal 2023 to more than US$974 million in fiscal 2025. Net profit rose from US$60 million to more than US$84 million over the same period. Another strong example is Rollins, a pest control company operating in a large, fragmented market with a rich pipeline of potential acquisition targets. In 2023, Rollins added 24 businesses through acquisitions. The following year, it ramped things up, executing 32 acquisitions and bringing 44 new businesses into its growing portfolio. This strategy has powered steady, profitable growth: Revenue increased from US$2.7 billion in 2022 to US$3.4 billion in 2024. Net profit climbed from US$368.6 million to US$466.4 million over the same period. These examples show that, when done with proper due diligence and strategic intent, serial acquisitions can be a powerful engine for long-term growth. The writer owns shares of Lululemon. He is portfolio manager of The Smart Investor, a website that aims to help people invest smartly by providing investor education, stock commentary and market coverage
Straits Times
5 days ago
- Straits Times
Charge withdrawn for man accused of helping trio allegedly linked to organised criminal group
SINGAPORE – A man accused of helping three Chinese nationals, who were allegedly linked to a global syndicate that conducted malicious cyber activities, has walked free after his charge was withdrawn on May 21. District Judge Ng Cheng Thiam granted Mr Goh Shi Yong, 35, a discharge amounting to an acquittal following a pre-trial conference that day. This means the Singaporean cannot be charged again over the same offence. Without revealing details, the Attorney-General's Chambers told The Straits Times on May 26: 'The charge pertained to Goh's alleged assistance to obtain residential internet access subscriptions for other accused persons. 'After careful consideration of the facts and circumstances of the matter, Goh's charge was withdrawn, and the prosecution applied for (the discharge). This was granted by the court on May 21.' Mr Goh had been accused of helping Liu Yuqi, 33, Huang Qin Zheng, 36, Yan Peijian, 39, subscribe to two Singtel broadband plans for a house in Mount Sinai Avenue near Holland Road where the trio lived. These four men were part of a group of six people who were charged in court in September 2024. Mr Goh is the sole Singaporean while the other five are Chinese nationals, whose cases are still pending. Liu, Huang and Yan are accused of multiple offences including being part of a locally linked organised criminal group between September 2022 and September 2024. The other two men are Sun Jiao, 43, and Zhang Qingqiao, 38. Sun now faces more than 20 charges including multiple counts of misusing a computer system, while Zhang is accused of offences including illegally obtaining the personal information of others without their consent. The six men were arrested after more than 150 officers from the Singapore Police Force's Criminal Investigation and Police Intelligence departments and Special Operations Command as well as the Internal Security Department (ISD) conducted simultaneous raids at multiple locations islandwide on Sept 9, 2024. Sun was caught at his home in a Bidadari Park Drive condominium and was 'found in possession of a laptop that contained credentials to access internet servers used by known hacker groups', the police and ISD said in an earlier joint statement. 'Five laptops, six mobile phones, cash of more than $24,000 and cryptocurrency worth approximately US$850,000 (S$1.1 million) were seized from him,' the authorities added. Liu, Huang and Yan were caught at their Mount Sinai Avenue home, where they allegedly had multiple incriminating items in their possession, including a laptop that was said to contain various computer hacking tools. Officers arrested Zhang at his home in a Cairnhill Road condominium. A laptop, nine mobile phones and $465,000 in cash were seized from him, said the police and ISD in September 2024. Mr Goh was caught at a Housing Board flat in Hougang. For being part of an organised criminal group, an offender can be jailed for up to five years and fined up to $100,000. Shaffiq Alkhatib is The Straits Times' court correspondent, covering mainly criminal cases heard at the State Courts. Join ST's WhatsApp Channel and get the latest news and must-reads.
Straits Times
6 days ago
- Business
- Straits Times
Singtel hits five-year high; no reprieve for Yangzijiang as stock slides further
Singtel has hit more than half of its $6 billion mid-term asset recycling target and is now raising this target to $9 billion. ST PHOTO: TARYN NG SINGAPORE - Shares of Singtel hit a five-year high of $3.99 on May 22, after the company announced it had proposed a final dividend of 10 cents per share for the financial year ended March 31. The proposal brought total dividends for the year to 17 cents, up from 15 cents in the previous year. Singtel also said it will buy back up to $2 billion of its shares over three years to return excess capital to shareholders. It added that the buybacks will be funded by excess capital from the group's asset recycling proceeds. Following its divestment of a 1.2 per cent stake in its Indian associate Bharti Airtel for $2 billion earlier in May, Singtel has hit more than half of its $6 billion mid-term asset recycling target and is now raising this target to $9 billion. The company reported a net profit of $4.02 billion for the financial year, more than five times that of the previous year. This was due to a net exceptional gain of $1.55 billion, mainly from the partial divestment of its Comcentre headquarters, compared with a net exceptional loss of $1.47 billion a year ago. Shares of Singtel were heavily traded through the week, and closed on May 23 at $3.88. Yangzijiang Shipbuilding continued to slide last week. The shipbuilder's shares have been falling ever since a US proposal to impose fees on Chinese-built vessels entering American ports was announced on Feb 21, the same day the shares hit an all-time high of $3.22. In a business update on May 22, Yangzijiang reported securing only six new ship orders worth US$290 million (S$372 million) in the first quarter of 2025 – less than 5 per cent of its US$6 billion annual target. The company attributed the slowdown to ship owners holding back amid uncertainty over US port fees. Yangzijiang also noted that it remains on track to deliver its targeted 56 vessels in 2025 and holds an order book valued at US$23.2 billion, with deliveries scheduled over the next three years. Nevertheless, its shares fell by more than 6 per cent through the week, closing on May 23 at $2.06. Thakral jumps on possible IPO of Australia associate Shares of Thakral Corporation jumped by more than 16 per cent to $1 on May 23, after providing an update on its associate company, GemLife, an over-50s lifestyle resorts business in Australia in which it holds a 31.7 per cent effective stake. Thakral said GemLife has made progress in evaluating its future growth options, including a potential initial public offering (IPO). The update follows an April 7 exchange filing, in which Thakral issued a clarification in response to an article published by the Australian Financial Review on April 2. The article had said that GemLife's owners have appointed financial advisers as well as representatives to arrange introductory meetings with investors as they explore a potential IPO. Thakral stated then that while introductory meetings with investors are being planned regarding GemLife, there is no certainty that any transaction will take place. In its first-quarter business update on May 19, Thakral, which invests in real estate and lifestyle brands, revealed that its revenue for the period had risen by 26.6 per cent year on year to $76 million. Meanwhile, its profit before tax was up 27.6 per cent to $6.3 million over the period, thanks to higher profit contributions from GemLife, which completed 58 new homes in its resorts during the quarter, taking the number of occupied homes it operates to 1,862 as at March 31. Great Eastern gets more time to restore its free float Insurer Great Eastern Holdings said on May 23 that it has been granted a third extension of time to comply with free float requirements under Singapore Exchange listing rules. The insurer now has until June 8 to announce its finalised proposal to comply with the rules and will issue an announcement on the matter 'no later' than that. Great Eastern noted in its stock exchange filing that it has been exploring various options to formulate a proposal that meets the minimum 10 per cent free float requirement and addresses the interests of stakeholders. It added that it has made 'significant progress' on that front. Shares of Great Eastern have been suspended from trading since July 2024, after the company lost its free float following a takeover bid by its majority shareholder OCBC Bank. OCBC in May 2024 made a $1.4 billion voluntary unconditional general offer for the remaining 11.56 per cent stake in Great Eastern that it did not already own. At the close of the offer in July 2024 however, the bank had managed to accumulate just 93.52 per cent of the insurer, falling short of the 95 per cent stake required for compulsory acquisition and delisting. Some minority shareholders, who say OCBC's offer price for Great Eastern of $25.60 per share is below what the insurer is worth, have refused to sell their shares. They have also noted an independent financial adviser's opinion that the offer, while reasonable, is nevertheless unfair. Great Eastern Holdings has been granted a third extension of time to comply with free float requirements under Singapore Exchange listing rules. ST PHOTO: KUA CHEE SIONG Meanwhile, chief executive of Cosmosteel Holdings Ong Tong Hai has been purchasing shares of the steel company in the open market. Between May 20 and May 23, Mr Ong purchased around 6.4 million Cosmosteel shares, raising his stake in the company to 16.98 per cent. Notably, at 21.87 cents to 22 cents each, the price paid by Mr Ong for the shares is higher than an ongoing offer of 20 cents per share made by an entity called 3HA Capital. 3HA Capital comprises parties including Hanwa Singapore, a subsidiary of Tokyo-listed steel trader Hanwa Co, which is Cosmosteel's single largest shareholder with a 31.61 per cent stake. While 3HA Capital's offer price of 20 cents is 48.1 per cent higher than Cosmosteel's share price of 13.5 cents on May 14, it is still a discount to the company's net asset value per share of 29.31 cents as at March 31. 3HA Capital has said that it plans to continue to develop and grow Cosmosteel's existing businesses and keep the company listed. However, if it receives more than 90 per cent of Cosmosteel's shares, it might then exercise the right to compulsorily acquire the remaining shares and delist the company. Other market movers Shares of Metro Holdings, which had initially surged at the start of the week, fell 1.2 per cent to close at 41 cents on May 23, after the real estate investment company reported losses for the year ended March 31. Metro Holdings reported losses for the year ended March 31. PHOTO: ST FILE Metro reported a loss after tax of $224.7 million for the period compared with a profit of $14.6 million in the previous year, due to reductions in the value of its property portfolio in China, where the economy continued to experience a downturn. Group revenue, which was mainly generated by sales at the Metro Paragon and Metro Causeway Point department stores in Singapore, fell by almost 10 per cent year on year to $104.5 million. As a result, the retail division reported a loss after tax of $6.9 million for the year compared with a profit of $1.8 million in the previous year, amid challenges confronting Singapore's retail sector, Metro CEO Yip Hoong Mun said. Shares of Food Empire continued to rise last week. They reached a five-year high of $1.80 on May 20, before closing the week at $1.77. Analysts have turned bullish on Food Empire since the company announced on May 13 higher revenues for the first quarter, driven by strong sales of its instant coffee products in Vietnam. In contrast, they are now less bullish over Thai Beverage, whose shares have lost value due to weaker margins and consumer sentiment in recent years. They closed last week at 46 cents, down by more than 2 per cent. What to look out for this week Shares of Sats could see some trading activity this week, after the company reported on May 23 after the market closed a net profit of $243.8 million for the year ended March 31. The company saw its profit rising by more than four times from a year ago, thanks to 'notable customer wins across (Sats') network, including multiple new cargo and ground handling contracts secured with key customers such as Air India, Emirates and DHL in major airports', CEO Kerry Mok said. Join ST's Telegram channel and get the latest breaking news delivered to you.
The Guardian
6 days ago
- Business
- The Guardian
AI to transform telecoms but technology won't completely replace humans, new Optus CEO says
Optus's new chief executive, Stephen Rue, says artificial intelligence will play a significant role in the future of telecommunications, but humans will remain central to the company. Rue joined the Australian mobile network operator, a subsidiary of Singaporean telecommunications company Singtel, in November last year after six years at the helm of the federal government's National Broadband Network (NBN). His appointment came after two tough years for the telco, with a massive data breach affecting millions of customers, and a 14-hour national mobile network outage that led to new rules around emergency calling. The previous chief executive, Kelly Bayer-Rosmarin, quit the company two weeks after the outage. Sign up for Guardian Australia's breaking news email Customers have slowly returned to Optus, with the company adding 238,000 new mobile subscribers, including 52,000 on postpaid plans, in its financial year ending 31 March 2025, results released on Thursday showed. As companies across the globe begin to examine how to incorporate artificial intelligence (AI) into their business, Rue said the technology would have a significant role in the future of telecommunications, particularly in helping customers. 'One of the things we need to do in terms of IT and data and, indeed, process redesign is to look at how we incorporate AI into that,' he said. 'It will help us with customer experience. It will help us with identifying faults, for example, by identifying customers' issues so that they [can be] dealt with, enabling them to simply solve their own problems, enabling us to look at customer segmentation in a more granular way, so that we can actually deliver offers, deliver products to customers.' He said while AI would find efficiencies in the company, humans would always have a role. 'On top of AI, there's clearly decisions that would need to be taken by humans,' he said. 'AI can help bring a lot of data analytics quickly to humans so they can make better decisions. 'For example, you'll always need technicians in the field. You always need people building, you'll always need people making decisions around creative, people making decisions in call centres for customers, so AI can actually supplement that.' Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion Rue said his focus since starting at Optus had been examining the company's governance, risk management and how to rebuild trust in the community. 'The other focus I've had is clearly in looking at our longer-term plans in terms of network, with not just a focus on resilience, which you'd expect, but also a focus on [the] company longer-term,' he said. 'It's simplifying the organisation, managing our costs and ensuring that we can continue to have a range of products that are competitive in the marketplace.' After spending endless hours over the past few years answering questions from senators in Senate estimates about the state of the NBN, Rue said he was not surprised the government-owned national broadband network had not been a key focus of the federal election this time around. 'There was a lot of debate over the last decade. I think with the National Broadband Network that has now clearly been not just built out, but there's clear plans to upgrade technology to more fibre-based and to higher speeds, and the NBN has obviously also increased the capability of the fixed wireless network,' he said. 'In some ways, a lot of the policy debate has either been settled or has moved on in the last decade.' Rue said there was more to do on mobile coverage across Australia, and he was looking forward to working with the government, including the new communications minister, Anika Wells, on the universal outdoor mobile coverage plan that would leverage commercial low-earth orbit satellite networks, such as Starlink, to supplement mobile networks in places where there was no coverage for text and calls. 'I think that clearly will be a discussion of policy and how that can be implemented,' he said. 'Personally, I'm very supportive of these discussions with government, and it will, I think, provide operators like Optus and an ability to provide cost-effective ways to provide those services.' Optus reported earnings before interest, tax, depreciation and amortisation of $2.2bn, up 5.7% on its previous financial year.
Independent Singapore
23-05-2025
- Business
- Independent Singapore
Singtel launches first share buyback programme of up to S$2B after fivefold rise in net profit
Justin Ng/Flickr SINGAPORE: Singtel has launched its first share buyback programme of up to S$2 billion, shortly after posting a fivefold increase in net profit to S$4.02 billion for FY 2025, Singapore Business Review reported. The group said the programme is part of its active capital management strategy to drive sustained growth and value for shareholders. 'Funding for the share buybacks will be underpinned by excess capital from the Group's asset recycling proceeds,' the group stated in a press release on Thursday (May 22). In May last year, the group set a mid-term asset recycling target of S$6 billion as part of its Singtel28 growth plan, which it is now raising to S$9 billion. Singtel's value realisation share buyback is its latest capital management initiative after it updated its dividend policy in May last year to include a value realisation dividend on top of its core dividend to return excess capital to shareholders. Its share buyback programme will be administered per Singtel's Share Purchase Mandate, allowing the group to buy back up to 5% of its total issued shares, excluding treasury shares and subsidiary holdings, with approval from shareholders at each annual general meeting. Singtel Group CFO Arthur Lang said, 'Building on the Group's proven track record in asset recycling, and the opportunities we are seeing, we are increasing our medium-term capital recycling target to S$9 billion to further fund business growth and return excess capital to our shareholders.' /TISG Read also: SIA staff to receive 7.45-month bonus for FY2025 after record net profit of S$2.78B
