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

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With S$22.6 billion combined market value, Singapore’s five largest medical suppliers by market capitalisation ranked among the strongest performing segments of the stock market in the 2Q21-to-date. The secondary listing of Sri Trang Agri Gloves (Thailand) PCL (“STGT”) debuted on the Mainboard on 10 May. 
	 </li>
	<li>
With 28 billion pieces of gloves sold in 2020, STGT estimate it is the world’s third largest glove producer, after Top Glove Corporation Bhd and Hartalega Holdings Bhd. Looking forward, the company is on track to reach 80 billion pieces in annual production capacity within 2024, and 100 billion pieces by 2026. 
	 </li>
	<li>Riverstone Holdings was the strongest performer of the five stocks in the 2Q21 quarter-to-date, with a 26.6% total return. For its 1Q21 (ended 31 Mar) the Group reported a 1,021.7% YoY surge in net profit attributable to shareholders to RM522.7 million, with the blended gross profit margin at 68.6%. </li>
</ul>
 

The Malaysian Rubber Glove Manufacturers Association estimate that global demand for rubber gloves will amount to 500 billion pieces of gloves this year, with the global supply projected to grow to 420 billion pieces, up from 360 million pieces in 2020 The report cited by <a href="https://www.theedgemarkets.com/article/margma-says-glove-demand-expected-continue-being-robust-until-2q2022">theedgemarkets.com</a> also estimated that 67% of the global supply of rubber gloves this year will come from Malaysia, with 18% provided by Thailand. Singapore’s five largest medical suppliers by market capitalisation have a combined market value of S$22.6 billion, with a combined average daily turnover of S$27 million in the 2021 year-to-date. Four of the stocks are rubber glove manufacturer and distributors, whilst Medtecs International Corporation (“Medtecs”) supplies and distributes personal protective equipment. Two of the stocks are Catalist listings – Medtecs and UG Healthcare Corporation. The secondary listing of Sri Trang Agri Gloves (Thailand) PCL (“STGT”) began trading on SGX this week after making its debut on the Mainboard on 10 May. Using the returns of the STGT primary listing in Thailand, together, the five stocks have averaged a 22.1% total return in the 2Q21 quarter-to-date. Three of these stocks also went ex-dividend over the past seven weeks. 
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-05/Capture_16.PNG' alt='2Q21 to 19 May total returns' />
 </figure>
 <div class='content-caption'>2Q21 to 19 May total returns</div>
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<tr>
<td>
			Stock
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			Net Insti &amp; Net Prop Flow 2Q21 to date S$M
			</td>
			<td>
			2Q21 -to-date Total Return %
			</td>
			<td>
			2021-to-date Total Return %
			</td>
			<td>
			P/E Ratio (x)
			</td>
		</tr>
<tr>
<td>
			Top Glove
			</td>
			<td>
			BVA
			</td>
			<td>
			14,088
			</td>
			<td>
			3.2
			</td>
			<td>
			15.8
			</td>
			<td>
			-7.6
			</td>
			<td>
			6.4
			</td>
		</tr>
<tr>
<td>
			Sri Trang Gloves
			</td>
			<td>
			STG
			</td>
			<td>
			5,829
			</td>
			<td>
			-0.1
			</td>
			<td>
			  18.8*
			</td>
			<td>
			  25.0*
			</td>
			<td>
			15.9
			</td>
		</tr>
<tr>
<td>
			Riverstone
			</td>
			<td>
			AP4
			</td>
			<td>
			2,208
			</td>
			<td>
			4.2
			</td>
			<td>
			26.6
			</td>
			<td>
			40.2
			</td>
			<td>
			14.4
			</td>
		</tr>
<tr>
<td>
			Medtecs Intl
			</td>
			<td>
			546
			</td>
			<td>
			601
			</td>
			<td>
			12.4
			</td>
			<td>
			25.3
			</td>
			<td>
			16.5
			</td>
			<td>
			3.4
			</td>
		</tr>
<tr>
<td>
			UG Healthcare
			</td>
			<td>
			8K7
			</td>
			<td>
			428
			</td>
			<td>
			-12.9
			</td>
			<td>
			24.1
			</td>
			<td>
			19.0
			</td>
			<td>
			6.2
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			22.1
			</td>
			<td>
			18.6
			</td>
			<td>
			9.3
			</td>
		</tr>
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 Source: SGX, Refinitiv, Bloomberg (Data as of 19 May). *Note Sri Trang Agri Gloves (Thailand) PCL based the returns of the primary listing

 

Recent Business Highlights 
Riverstone Holdings was the strongest performer of the five stocks in the 2Q21 quarter-to-date, with a 26.6% total return. The stock also outpaced the other four stocks with a 40.3% total return in the 2021 year-to-date. For its 1Q21 (ended 31 Mar) business update, provided on 10 May, Riverstone Holdings reported a significant 269.5% YoY increase in revenue to RM 1.0 billion. The Group noted that production costs including packaging and raw material costs remained elevated, however the surge in average selling prices of glove products has led to a 1,021.7% YoY surge in net profit attributable to shareholders to RM522.7 million for 1Q21, with the blended gross profit margin expanding 44.6 percentage points yoy to 68.6% for 1Q21. Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/QH3UECUNJRCIKHHA/339e86221522618f2ec5163a8c4bc819b720a1b7a87bb3074f9fae08b06c7e60https:/links.sgx.com/1.0.0/corporate-announcements/QH3UECUNJRCIKHHA/339e86221522618f2ec5163a8c4bc819b720a1b7a87bb3074f9fae08b06c7e60">here</a> for more. 
UG Healthcare Corporation highlighted in a Business Update on 10 May that for its 3QFY21 (ended 31 March) revenue more than doubled YoY, even surpassing the S$91.8 million recorded for 9MFY20. This was mainly due to the higher volume of gloves produced and sold, as well as relatively stable average selling prices of both nitrile and natural latex gloves in the key markets in 3QFY21. Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/EF291JPYNVFEBOJ9/03b66d2a0fbe97b3381f026100b984f2d16b32bf1eddb50b25385209de942d5e">here</a> for more. Top Glove Corporation Bhd attained the highest ever quarterly Sales Revenue of RM5.37 billion in its 2QFY21 (ended 28 February), a 336% YoY increase to 2QFY20. Profit after tax surged by 24 times to RM2.9 billion, exceeding the Group’s profit for the full FY20. The Group added that sales volume was also on the uptrend, rising by 19% versus 2QFY20. Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/37M473XANBUR2BO5/6c389b0ff4af3e054a0b86362b80b5790ee201a85d0f68143e9e9874ffa6000e">here</a> for more. 
Medtecs International Corporation is a leading global supplier and distributor of personal protective equipment (“PPE”) and provider of logistics services to healthcare institutions. The company has over 30 years of experience in the manufacturing of PPE and workwear. The company reported 259.9% YoY growth in its 1Q21 (ended 31 Mar) net profit which followed a record-breaking year in terms of revenue and profitability in its FY20. With the results released on 6 May, the Board noted that it will be a challenge for the company to exceed the level of performance of 2020. Nonetheless, Medtecs International Corporation has doubled up engagement with group purchasing organisations, institutional clients and government agencies to initiate provision of its PPE stockpiling services and as a result, has secured several supply contracts in the Philippines and Cambodia in 1Q21. Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/MUN9DE6834HSG6GW/665327_Medtecs%20-%20Announcement%20on%20Unaudited%20First%20Quarter%20Results%20and%20Outlook_May%206%202021.pdf">here</a> for more. Sri Trang Agri Gloves (Thailand) PCL 
STGT has secondary-listed on SGX. The Company manufactures and distributes rubber gloves, mainly for medical use. The powdered natural rubber gloves, powder-free natural rubber gloves and nitrile gloves, are manufactured in factories strategically located in Thailand. The Company has been operating for 30 years and its products have been exported to more than 140 countries worldwide, including countries in North America, South America, Europe, Asia Pacific, the Middle East, Africa and Oceania.

 

<ul>
<li>STGT listed on Stock Exchange of Thailand (“SET”) on 2 July 2020, with the shares closing at THB 30.25 (~S$1.36) on its debut, before ending the month of July at THB 40.75 (~S$1.79). The stock closed the Thailand AM session at THB 47.25 (~S$2.00) on 19 May. Sri Trang Agro Industry PCL maintains a 50.75% interest in STGT. Since listing in Thailand, STGT has not been significantly correlated to the share price of the Singapore listing of Sri Trang Agro Industry PCL with a simple 51% correlation of the daily close price. 
	 </li>
	<li>
The secondary listing of STGT began trading on SGX this week after making its debut on the Mainboard on 10 May. The secondary listing of the stock is supported by market marking participants. At the time of writing the stock bid S$2.01 for 2,000 shares, with 9.600 shares offered at the ask price of S$2.04. The size of shares on the bid-ask are anticipated to increase, should shareholders of the SET listing continue to transfer their holdings to the SGX CDP. 
	 </li>
	<li>For the primary listing, SET trading <a href="https://www.set.or.th/en/products/trading/equity/tradingsystem_p2.html">hours</a>, which include random opening times and a day-end random closing time than span 5 minute timeframes, are currently (in Singapore hours) 10:55am-11:00am to 1:30pm, SGT, followed by the afternoon session which is currently 3:25pm-3:30pm to 5:35pm-5:40pm, SGT. The Singapore listing of STGT trades normal SGX hours. 
	 </li>
	<li>
STGT maintains a market capitalisation of S$5.8 billion, which ranks among the 30 largest stocks by market capitalisation listed on SGX. The free float market capitalisation of the stock is approximately S$2.0 billion, representing 34% of the total market capitalisation. 
	 </li>
	<li>
STGT estimates it is the world’s third largest glove producer, which would rank its production output after Top Glove Corporation Bhd and Hartalega Holdings Bhd. For its FY20 (ended 31 Dec), the company sold 28 billion pieces of gloves. Looking forward, Sri Trang Gloves (Thailand) PCL CEO Jarinya Jirojkul highlighted in the Annual Report 2020 that the company is on track to reach 80 billion pieces in annual production capacity within 2024, and 100 billion pieces by 2026. The Company plans to expand its factories in Surat Thani and Trang, while constructing three new factories – PS Factory in Sadao District, Songkhla Province, Anvar Factory in Sumnakkham District, Songkhla Province, and Chumphon Factory in Pathiew District, Chumphon Province. The company will also explore expansion through possible mergers or acquisitions where appropriate. 
	 </li>
	<li>
On 12 May, the Company reported record quarterly net profits. For its 1Q21 (ended 31 Mar) the Company recorded a new net profit record of THB 10,051.6 million, increasing 2,245.0% YoY and 18.0% QoQ with a net profit margin of 65.1%. Total assets increased by THB 9,931.6 million from the end of FY20 to THB 54,167.5 million and mainly consisted of THB 29,453.7 million in cash, which increased by THB 5,179.7 million from profits during 1Q21. Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/QJP3Y96EYTZWAQAZ/a3c22238450e82b0ea742777059ddd18266557d373cff087e9e85839b0fddd2d">here</a> for more.</li>
</ul>
 

The SGX All Healthcare Index has generated a 14.3% total return in the 2021 year to 19 May. The Index will next be semi-reviewed in September, with the review on 31 August, and results announced on 27 September. However, secondary listings with a minimum of three months trading can be potentially included in the Index in between rebalance dates. The iEdge All Healthcare Index is a free-float market capitalisation weighted index that measures the performance of the listed healthcare segment in Singapore. Constituents in the index include healthcare providers, manufactures &amp; distributers of medical equipment, pharmaceutical companies, biotechnology companies and healthcare asset owners. To be eligible for index inclusion, new constituents must either derive at least 50% of sales revenue from the healthcare sector; or maintain at least 50% of operating assets within the healthcare sector. For more information on the Index methodology, click <a href="https://www.sgx.com/indices/products/sgxhc">here</a>.
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With S$22.6 billion combined market value, Singapore’s five largest medical suppliers by market capitalisation ranked among the strongest performing segments of the stock market in the 2Q21-to-date. The secondary listing of Sri Trang Agri Gloves (Thailand) PCL (“STGT”) debuted on the Mainboard on 10 May.  
	 
	
With 28 billion pieces of gloves sold in 2020, STGT estimate it is the world’s third largest glove producer, after Top Glove Corporation Bhd and Hartalega Holdings Bhd. Looking forward, the company is on track to reach 80 billion pieces in annual production capacity within 2024, and 100 billion pieces by 2026.  
	 
	Riverstone Holdings was the strongest performer of the five stocks in the 2Q21 quarter-to-date, with a 26.6% total return. For its 1Q21 (ended 31 Mar) the Group reported a 1,021.7% YoY surge in net profit attributable to shareholders to RM522.7 million, with the blended gross profit margin at 68.6%. 

 

The Malaysian Rubber Glove Manufacturers Association estimate that global demand for rubber gloves will amount to 500 billion pieces of gloves this year, with the global supply projected to grow to 420 billion pieces, up from 360 million pieces in 2020 The report cited by theedgemarkets.com also estimated that 67% of the global supply of rubber gloves this year will come from Malaysia, with 18% provided by Thailand.  Singapore’s five largest medical suppliers by market capitalisation have a combined market value of S$22.6 billion, with a combined average daily turnover of S$27 million in the 2021 year-to-date. Four of the stocks are rubber glove manufacturer and distributors, whilst Medtecs International Corporation (“Medtecs”) supplies and distributes personal protective equipment. Two of the stocks are Catalist listings – Medtecs and UG Healthcare Corporation. The secondary listing of Sri Trang Agri Gloves (Thailand) PCL (“STGT”) began trading on SGX this week after making its debut on the Mainboard on 10 May. Using the returns of the STGT primary listing in Thailand, together, the five stocks have averaged a 22.1% total return in the 2Q21 quarter-to-date. Three of these stocks also went ex-dividend over the past seven weeks. 



      
    
    2Q21 to 19 May total returns





			Stock
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			Net Insti &amp; Net Prop Flow 2Q21 to date S$M
			
			
			2Q21 -to-date Total Return %
			
			
			2021-to-date Total Return %
			
			
			P/E Ratio (x)
			
		


			Top Glove
			
			
			BVA
			
			
			14,088
			
			
			3.2
			
			
			15.8
			
			
			-7.6
			
			
			6.4
			
		


			Sri Trang Gloves
			
			
			STG
			
			
			5,829
			
			
			-0.1
			
			
			  18.8*
			
			
			  25.0*
			
			
			15.9
			
		


			Riverstone
			
			
			AP4
			
			
			2,208
			
			
			4.2
			
			
			26.6
			
			
			40.2
			
			
			14.4
			
		


			Medtecs Intl
			
			
			546
			
			
			601
			
			
			12.4
			
			
			25.3
			
			
			16.5
			
			
			3.4
			
		


			UG Healthcare
			
			
			8K7
			
			
			428
			
			
			-12.9
			
			
			24.1
			
			
			19.0
			
			
			6.2
			
		


			Average
			
			
			 
			
			
			 
			
			
			 
			
			
			22.1
			
			
			18.6
			
			
			9.3
			
		

 Source: SGX, Refinitiv, Bloomberg (Data as of 19 May). *Note Sri Trang Agri Gloves (Thailand) PCL based the returns of the primary listing

 

Recent Business Highlights  
Riverstone Holdings was the strongest performer of the five stocks in the 2Q21 quarter-to-date, with a 26.6% total return. The stock also outpaced the other four stocks with a 40.3% total return in the 2021 year-to-date. For its 1Q21 (ended 31 Mar) business update, provided on 10 May, Riverstone Holdings reported a significant 269.5% YoY increase in revenue to RM 1.0 billion. The Group noted that production costs including packaging and raw material costs remained elevated, however the surge in average selling prices of glove products has led to a 1,021.7% YoY surge in net profit attributable to shareholders to RM522.7 million for 1Q21, with the blended gross profit margin expanding 44.6 percentage points yoy to 68.6% for 1Q21. Click here for more.  
UG Healthcare Corporation highlighted in a Business Update on 10 May that for its 3QFY21 (ended 31 March) revenue more than doubled YoY, even surpassing the S$91.8 million recorded for 9MFY20. This was mainly due to the higher volume of gloves produced and sold, as well as relatively stable average selling prices of both nitrile and natural latex gloves in the key markets in 3QFY21. Click here for more. Top Glove Corporation Bhd attained the highest ever quarterly Sales Revenue of RM5.37 billion in its 2QFY21 (ended 28 February), a 336% YoY increase to 2QFY20. Profit after tax surged by 24 times to RM2.9 billion, exceeding the Group’s profit for the full FY20. The Group added that sales volume was also on the uptrend, rising by 19% versus 2QFY20. Click here for more.  
Medtecs International Corporation is a leading global supplier and distributor of personal protective equipment (“PPE”) and provider of logistics services to healthcare institutions. The company has over 30 years of experience in the manufacturing of PPE and workwear. The company reported 259.9% YoY growth in its 1Q21 (ended 31 Mar) net profit which followed a record-breaking year in terms of revenue and profitability in its FY20. With the results released on 6 May, the Board noted that it will be a challenge for the company to exceed the level of performance of 2020. Nonetheless, Medtecs International Corporation has doubled up engagement with group purchasing organisations, institutional clients and government agencies to initiate provision of its PPE stockpiling services and as a result, has secured several supply contracts in the Philippines and Cambodia in 1Q21. Click here for more.  Sri Trang Agri Gloves (Thailand) PCL   
STGT has secondary-listed on SGX. The Company manufactures and distributes rubber gloves, mainly for medical use. The powdered natural rubber gloves, powder-free natural rubber gloves and nitrile gloves, are manufactured in factories strategically located in Thailand. The Company has been operating for 30 years and its products have been exported to more than 140 countries worldwide, including countries in North America, South America, Europe, Asia Pacific, the Middle East, Africa and Oceania.

 


STGT listed on Stock Exchange of Thailand (“SET”) on 2 July 2020, with the shares closing at THB 30.25 (~S$1.36) on its debut, before ending the month of July at THB 40.75 (~S$1.79). The stock closed the Thailand AM session at THB 47.25 (~S$2.00) on 19 May. Sri Trang Agro Industry PCL maintains a 50.75% interest in STGT. Since listing in Thailand, STGT has not been significantly correlated to the share price of the Singapore listing of Sri Trang Agro Industry PCL with a simple 51% correlation of the daily close price. 
	 
	
The secondary listing of STGT began trading on SGX this week after making its debut on the Mainboard on 10 May. The secondary listing of the stock is supported by market marking participants. At the time of writing the stock bid S$2.01 for 2,000 shares, with 9.600 shares offered at the ask price of S$2.04. The size of shares on the bid-ask are anticipated to increase, should shareholders of the SET listing continue to transfer their holdings to the SGX CDP. 
	 
	For the primary listing, SET trading hours, which include random opening times and a day-end random closing time than span 5 minute timeframes, are currently (in Singapore hours) 10:55am-11:00am to 1:30pm, SGT, followed by the afternoon session which is currently 3:25pm-3:30pm to 5:35pm-5:40pm, SGT. The Singapore listing of STGT trades normal SGX hours. 
	 
	
STGT maintains a market capitalisation of S$5.8 billion, which ranks among the 30 largest stocks by market capitalisation listed on SGX. The free float market capitalisation of the stock is approximately S$2.0 billion, representing 34% of the total market capitalisation. 
	 
	
STGT estimates it is the world’s third largest glove producer, which would rank its production output after Top Glove Corporation Bhd and Hartalega Holdings Bhd. For its FY20 (ended 31 Dec), the company sold 28 billion pieces of gloves. Looking forward, Sri Trang Gloves (Thailand) PCL CEO Jarinya Jirojkul highlighted in the Annual Report 2020 that the company is on track to reach 80 billion pieces in annual production capacity within 2024, and 100 billion pieces by 2026. The Company plans to expand its factories in Surat Thani and Trang, while constructing three new factories – PS Factory in Sadao District, Songkhla Province, Anvar Factory in Sumnakkham District, Songkhla Province, and Chumphon Factory in Pathiew District, Chumphon Province. The company will also explore expansion through possible mergers or acquisitions where appropriate. 
	 
	
On 12 May, the Company reported record quarterly net profits. For its 1Q21 (ended 31 Mar) the Company recorded a new net profit record of THB 10,051.6 million, increasing 2,245.0% YoY and 18.0% QoQ with a net profit margin of 65.1%. Total assets increased by THB 9,931.6 million from the end of FY20 to THB 54,167.5 million and mainly consisted of THB 29,453.7 million in cash, which increased by THB 5,179.7 million from profits during 1Q21. Click here for more.

 

The SGX All Healthcare Index has generated a 14.3% total return in the 2021 year to 19 May. The Index will next be semi-reviewed in September, with the review on 31 August, and results announced on 27 September. However, secondary listings with a minimum of three months trading can be potentially included in the Index in between rebalance dates. The iEdge All Healthcare Index is a free-float market capitalisation weighted index that measures the performance of the listed healthcare segment in Singapore. Constituents in the index include healthcare providers, manufactures &amp; distributers of medical equipment, pharmaceutical companies, biotechnology companies and healthcare asset owners. To be eligible for index inclusion, new constituents must either derive at least 50% of sales revenue from the healthcare sector; or maintain at least 50% of operating assets within the healthcare sector. For more information on the Index methodology, click here.



Key Medical Suppliers on the Move in 2Q21   

Malaysia

Hartalega Holdings Bhd. manufactures a wide range of latex gloves. The Company's products include natural rubber examination gloves, nitrile examination gloves, nitrile clean room gloves and natural rubber surgical gloves.

Hartalega Holdings (HART MK)

Key Medical Suppliers on the Move in 2Q21

With S$22.6 billion combined market value, Singapore’s five largest medical suppliers by market capitalisation ranked among the strongest...

Singapore Exchange Ltd (SGX)