SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

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Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.<h2>Fu Yu Corp</h2>
Moulding for growth
<ul>
<li>Turnaround in manufacturing across all regions</li>
<li>Favourable shift in product mix towards higher profitability and growth potential</li>
<li>Improving margins; high cash level (0.11 Scts/share) and attractive yield at 6.4%</li>
<li>Initiate with BUY and TP of S$0.35</li>
</ul>
Turnaround in manufacturing across all regions. Manufacturing PMIs in China, Singapore, and Malaysia, where Fu Yu’s manufacturing facilities are located, are indicating an expansion in the manufacturing sector. We believe that this will lead to an uptick in earnings for Fu Yu.
Emphasis on products with higher profitability and growth potential. Part of the Group’s business strategy is to shift towards producing parts for products in the consumer, medical, and automotive space, which have higher profitability and growth potential, as compared to printing and imaging segment.
Cost efficiency to improve margins. Fu Yu is also expanding its margins through cost enhancement initiatives. The redevelopment of its Singapore factory and consolidation of its China operations in Shanghai and Suzhou will further lift normalised net profit margins to 8.2% in FY2020F, from 5.4% in FY2018.
Strong financial positioning. Fu Yu has a high cash level and no debt. Its cash level is equivalent to 44.1% of its market capitalisation and 37.7% of total assets. It has an attractive dividend yield of c.6.4% in FY2019F and TTM EV/EBITDA of 4.4x, vs peers of 6 to 7x.

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.Fu Yu Corp
Moulding for growth

Turnaround in manufacturing across all regions
Favourable shift in product mix towards higher profitability and growth potential
Improving margins; high cash level (0.11 Scts/share) and attractive yield at 6.4%
Initiate with BUY and TP of S$0.35

Turnaround in manufacturing across all regions. Manufacturing PMIs in China, Singapore, and Malaysia, where Fu Yu’s manufacturing facilities are located, are indicating an expansion in the manufacturing sector. We believe that this will lead to an uptick in earnings for Fu Yu.
Emphasis on products with higher profitability and growth potential. Part of the Group’s business strategy is to shift towards producing parts for products in the consumer, medical, and automotive space, which have higher profitability and growth potential, as compared to printing and imaging segment.
Cost efficiency to improve margins. Fu Yu is also expanding its margins through cost enhancement initiatives. The redevelopment of its Singapore factory and consolidation of its China operations in Shanghai and Suzhou will further lift normalised net profit margins to 8.2% in FY2020F, from 5.4% in FY2018.
Strong financial positioning. Fu Yu has a high cash level and no debt. Its cash level is equivalent to 44.1% of its market capitalisation and 37.7% of total assets. It has an attractive dividend yield of c.6.4% in FY2019F and TTM EV/EBITDA of 4.4x, vs peers of 6 to 7x.

Non-SGX Report: Fu Yu Corp: Moulding for Growth

Singapore

Fu Yu Corporation Limited manufactures and sells precision plastic injection molds and plastic components.  The Company also manufactures and sells plastic, aluminum parts, electronic products, and equipment for medical use.

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Fu Yu Corp Ltd (FUYU SP)

Non-SGX Report: Fu Yu Corp: Moulding for Growth

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please...

Singapore Exchange Ltd (SGX)

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