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.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

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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<ul>
<li>
Singapore’s largest non-cyclical consumer stocks by market cap focused on food production have averaged 5% defensive total returns since regional market highs on 9 June. This marginally outpaced global peers that generated a median 2% over the same period.   
	 </li>
	<li>
The strongest performers of this group of Singapore stocks over the period were Mewah International, Del Monte Pacific, ABR Holdings, QAF and Wilmar, with 27% average gains bringing their average 2020 YTD total return to 9%, compared to an 18% YTD decline of for the FTSE ASEAN All-Share Index. 
	 </li>
	<li>
Wilmar is the largest stock of the Singapore group, and plans to list its YKA China business on ChiNext this month, subject to market conditions. This is intended to unlock value for shareholders with food production stocks in China trading at 42x P/E, compared to global ex-China peers that trade at 16x P/E.   
	 </li>
	<li>Wilmar’s China business accounted for ~60% of its FY19 profit. With an indicative 31x P/E valuation for the YKA business, and overall Group P/E of 15x, current pricing is potentially valuing Wilmar’s Ex-China, but globally integrated business with multiple FY19 expansion highlights at a significant markdown.   </li>
</ul>
 

Singapore Food Producers Average 5% Gain Since 9 June 
Like most manufacturers, food processing and production companies seek to maximise profits, while continuing to improve throughput, control costs and maximise cashflow. Food production stocks are generally categorised as more defensive or non-cyclical, consumer goods or staples, due to the necessary demand for food. However, within the sector, businesses can also be subject to a number of cyclical, seasonal and competitive forces. Since regional market highs were formed on 9 June, Food Producer stocks listed in Singapore with a market value of more than S$100 million have averaged a 5.1% total return, which compares to the Straits Times Index decline of 9.1% and  FTSE ASEAN All-Share Index decline of 8.3%. As illustrated below, the 5.1% return marginally outpaced global stocks of the same genre, with seven of the 13 Singapore stocks generating gains over the period.
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-10/Capture_0.PNG' alt='Total Returns' />
 </figure>
 <div class='content-caption'>Total Returns</div>
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<html><body>Wilmar Scheduled Plans to List YKA on the Shenzhen Stock Exchange ChiNext Board in Oct 
Wilmar International (“Wilmar”) is Singapore’s  largest stock by market value that represents the non-cyclical consumer stocks. The stock has generated a 10.2% total return in the 2020 year to 2 October, with S$69.4 million of net institutional inflow, and has been Singapore Exchange’s eight most traded stock for the 40 weeks. Since the STI formed its June 9 high, Wilmar generated a total return of 13.7%. Wilmar’s proposed listing of Yihai Kerry Arawana Holdings Co., Ltd (“YKA”) on the Shenzhen Stock Exchange ChiNext Board is planned to take place by mid-October 2020, however there is no certainty that the proposed listing will proceed as it is still subject to prevailing market conditions. YKA will be 90% owned by Wilmar with a 10% Free Float on the SZSE ChiNext board. The most recent update on the scheduled listing can be found <a href="https://links.sgx.com/1.0.0/corporate-announcements/TZAEJVOICXSR9KO7/572d1d776e36f33ff5dc4c5ae2d21f42b3ab9a54f256603c67f253f6ff73de81">here</a>.  
Wilmar has long maintained the YKA listing is intended unlock value for shareholders as China with food production stocks in China trading near 40x their earnings. As illustrated below, the median P/E ratio of China food production stocks is 42.3x compared to 16.0x for global food production stocks ex-China. Over the past ten years, there has been some gradual convergence of the P/E valuations, however China remains a consumer powerhouse. In terms of scale, comparative populations indicate China is home to 250 times as many consumers as Singapore.</body></html>

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-10/Capture_1.PNG' alt='Median' />
 </figure>
 <div class='content-caption'>Median</div>
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In the recent AGM, Wilmar’s management noted that Wilmar’s China business: (I) accounted for about 60% of Wilmar’s 2019 profit and (II), that the profit margins from the Food Product business were more stable than margins from the Feed Ingredients business. With an indicative 31x P/E valuation for the YKA business, and overall Group P/E of 15x, current pricing is potentially valuing Wilmar’s ex-China, but globally integrated business at a significant markdown. While the population of China is 1.4 billion, Wilmar maintain that its products now reach 5 billion consumers worldwide. 
Wilmar is branded as Asia’s leading agribusiness group, with its integrated agribusiness model encompassing the entire value chain of the agricultural commodity business, from cultivation, processing, merchandising to manufacturing of a wide range of branded agricultural products.  Aside from its expansion in its China operations, Wilmar’s FY19 Annual Report highlighted the following global business expansions: 
 

<ul>
<li>A presence in 16 countries across Africa, and is the largest edible oils refiner and a leading oil palm plantation owner on the continent;</li>
	<li>A 50:50 joint venture with Adani Wilmar Limited (“AWL”)  in India, which is the largest refiner and producer of consumer pack edible oils in the country. AWL has expanded into rice and rice milling, as well as enhanced its consumer product offering;</li>
	<li>In Indonesia, Wilmar is continuing to expand its flour and rice milling, oleochemicals,  biodiesel,  refining and packaging  capacities in existing and new sites.</li>
	<li>In Malaysia, 2019 saw Wilmar complete</li>
	<li>the purchase of two palm oil refineries in Kuantan and Kuching and start construction of a new refinery and a specialty fats plant in Port Klang.</li>
	<li>In Vietnam, Wilmar maintains its leadership position in its core businesses including edible oils and soybean crushing while its new businesses such as rice, grains value-added processing and sauces are growing in domestic sales volume. Wilmar is also expanding its flour and rice milling capacity in Vietnam.</li>
	<li>In Myanmar, the edible oils packing plant and flour  mill commenced operation in Thilawa  in October 2019. Concurrently Wilmar has also begun the construction of a rice milling complex which, when completed, will be the largest in Myanmar, and are in the  process of acquiring another rice mill.</li>
	<li>Completed the acquisition of the balance 50% interest in Goodman Fielder from First Pacific Company Limited in December 2019, looking to expand operations in Australia, New Zealand, Papua New Guinea and the Pacific Islands.
</li>
</ul>
 

Singapore lists 13 consumer non-cyclical stocks with a market capitalisation of more than S$100 million. The strongest performers of this group of 13 Singapore stocks since 9 June were Mewah International, Del Monte Pacific, ABR Holdings, QAF and Wilmar International. The five stocks averaged 27% total returns bringing their average 2020 year to 2 October total return to 9%.

<table class="table table-striped"><tbody>
<tr>
<td>
			Non-Cyclical Consumer Stocks with Food Production/Processing Focus
			</td>
			<td>
			Code
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			Total Return % Since 9 June 
			</td>
			<td>
			YTD Total Return %
			</td>
			<td>
			180 Day 

			Volatility

			%
			</td>
			<td>
			P/E

			(x)
			</td>
		</tr>
<tr>
<td>
			Wilmar International
			</td>
			<td>
			F34
			</td>
			<td>
			27,919
			</td>
			<td>
			14
			</td>
			<td>
			10
			</td>
			<td>
			43
			</td>
			<td>
			15
			</td>
		</tr>
<tr>
<td>
			Olam International
			</td>
			<td>
			O32
			</td>
			<td>
			3,995
			</td>
			<td>
			-14
			</td>
			<td>
			-27
			</td>
			<td>
			32
			</td>
			<td>
			7
			</td>
		</tr>
<tr>
<td>
			First Resources
			</td>
			<td>
			EB5
			</td>
			<td>
			1,943
			</td>
			<td>
			-15
			</td>
			<td>
			-34
			</td>
			<td>
			41
			</td>
			<td>
			14
			</td>
		</tr>
<tr>
<td>
			Golden Agri-Resources
			</td>
			<td>
			E5H
			</td>
			<td>
			1,802
			</td>
			<td>
			-10
			</td>
			<td>
			-37
			</td>
			<td>
			36
			</td>
			<td>
			16
			</td>
		</tr>
<tr>
<td>
			Fraser And Neave
			</td>
			<td>
			F99
			</td>
			<td>
			1,769
			</td>
			<td>
			-19
			</td>
			<td>
			-27
			</td>
			<td>
			31
			</td>
			<td>
			12
			</td>
		</tr>
<tr>
<td>
			Japfa
			</td>
			<td>
			UD2
			</td>
			<td>
			1,260
			</td>
			<td>
			-8
			</td>
			<td>
			9
			</td>
			<td>
			55
			</td>
			<td>
			5
			</td>
		</tr>
<tr>
<td>
			Bumitama Agri
			</td>
			<td>
			P8Z
			</td>
			<td>
			841
			</td>
			<td>
			4
			</td>
			<td>
			-38
			</td>
			<td>
			47
			</td>
			<td>
			10
			</td>
		</tr>
<tr>
<td>
			QAF
			</td>
			<td>
			Q01
			</td>
			<td>
			529
			</td>
			<td>
			18
			</td>
			<td>
			21
			</td>
			<td>
			36
			</td>
			<td>
			10
			</td>
		</tr>
<tr>
<td>
			Delfi
			</td>
			<td>
			P34
			</td>
			<td>
			413
			</td>
			<td>
			-17
			</td>
			<td>
			-29
			</td>
			<td>
			41
			</td>
			<td>
			13
			</td>
		</tr>
<tr>
<td>
			Mewah International Inc
			</td>
			<td>
			MV4
			</td>
			<td>
			398
			</td>
			<td>
			40
			</td>
			<td>
			11
			</td>
			<td>
			71
			</td>
			<td>
			8
			</td>
		</tr>
<tr>
<td>
			Del Monte Pacific
			</td>
			<td>
			D03
			</td>
			<td>
			241
			</td>
			<td>
			39
			</td>
			<td>
			7
			</td>
			<td>
			69
			</td>
			<td>
			N/A
			</td>
		</tr>
<tr>
<td>
			JB Foods
			</td>
			<td>
			BEW
			</td>
			<td>
			174
			</td>
			<td>
			9
			</td>
			<td>
			-5
			</td>
			<td>
			62
			</td>
			<td>
			6
			</td>
		</tr>
<tr>
<td>
			ABR Holdings
			</td>
			<td>
			533
			</td>
			<td>
			141
			</td>
			<td>
			23
			</td>
			<td>
			-3
			</td>
			<td>
			105
			</td>
			<td>
			57
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			5
			</td>
			<td>
			-11
			</td>
			<td>
			52
			</td>
			<td>
			14
			</td>
		</tr>
<tr>
<td>
			Median
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			4
			</td>
			<td>
			-5
			</td>
			<td>
			43
			</td>
			<td>
			11
			</td>
		</tr>
</tbody></table>
 Source: SGX, Bloomberg, Refinitiv (Data as of 2 October 2020)
</body></html>





Singapore’s largest non-cyclical consumer stocks by market cap focused on food production have averaged 5% defensive total returns since regional market highs on 9 June. This marginally outpaced global peers that generated a median 2% over the same period.    
	 
	
The strongest performers of this group of Singapore stocks over the period were Mewah International, Del Monte Pacific, ABR Holdings, QAF and Wilmar, with 27% average gains bringing their average 2020 YTD total return to 9%, compared to an 18% YTD decline of for the FTSE ASEAN All-Share Index. 
	 
	
Wilmar is the largest stock of the Singapore group, and plans to list its YKA China business on ChiNext this month, subject to market conditions. This is intended to unlock value for shareholders with food production stocks in China trading at 42x P/E, compared to global ex-China peers that trade at 16x P/E.    
	 
	Wilmar’s China business accounted for ~60% of its FY19 profit. With an indicative 31x P/E valuation for the YKA business, and overall Group P/E of 15x, current pricing is potentially valuing Wilmar’s Ex-China, but globally integrated business with multiple FY19 expansion highlights at a significant markdown.   

 

Singapore Food Producers Average 5% Gain Since 9 June  
Like most manufacturers, food processing and production companies seek to maximise profits, while continuing to improve throughput, control costs and maximise cashflow. Food production stocks are generally categorised as more defensive or non-cyclical, consumer goods or staples, due to the necessary demand for food. However, within the sector, businesses can also be subject to a number of cyclical, seasonal and competitive forces.  Since regional market highs were formed on 9 June, Food Producer stocks listed in Singapore with a market value of more than S$100 million have averaged a 5.1% total return, which compares to the Straits Times Index decline of 9.1% and  FTSE ASEAN All-Share Index decline of 8.3%. As illustrated below, the 5.1% return marginally outpaced global stocks of the same genre, with seven of the 13 Singapore stocks generating gains over the period.



      
    
    Total Returns

Wilmar Scheduled Plans to List YKA on the Shenzhen Stock Exchange ChiNext Board in Oct  
Wilmar International (“Wilmar”) is Singapore’s  largest stock by market value that represents the non-cyclical consumer stocks. The stock has generated a 10.2% total return in the 2020 year to 2 October, with S$69.4 million of net institutional inflow, and has been Singapore Exchange’s eight most traded stock for the 40 weeks. Since the STI formed its June 9 high, Wilmar generated a total return of 13.7%.  Wilmar’s proposed listing of Yihai Kerry Arawana Holdings Co., Ltd (“YKA”) on the Shenzhen Stock Exchange ChiNext Board is planned to take place by mid-October 2020, however there is no certainty that the proposed listing will proceed as it is still subject to prevailing market conditions. YKA will be 90% owned by Wilmar with a 10% Free Float on the SZSE ChiNext board. The most recent update on the scheduled listing can be found here.   
Wilmar has long maintained the YKA listing is intended unlock value for shareholders as China with food production stocks in China trading near 40x their earnings. As illustrated below, the median P/E ratio of China food production stocks is 42.3x compared to 16.0x for global food production stocks ex-China. Over the past ten years, there has been some gradual convergence of the P/E valuations, however China remains a consumer powerhouse. In terms of scale, comparative populations indicate China is home to 250 times as many consumers as Singapore.


      
    
    Median


In the recent AGM, Wilmar’s management noted that Wilmar’s China business: (I) accounted for about 60% of Wilmar’s 2019 profit and (II), that the profit margins from the Food Product business were more stable than margins from the Feed Ingredients business.  With an indicative 31x P/E valuation for the YKA business, and overall Group P/E of 15x, current pricing is potentially valuing Wilmar’s ex-China, but globally integrated business at a significant markdown. While the population of China is 1.4 billion, Wilmar maintain that its products now reach 5 billion consumers worldwide.  
Wilmar is branded as Asia’s leading agribusiness group, with its integrated agribusiness model encompassing the entire value chain of the agricultural commodity business, from cultivation, processing, merchandising to manufacturing of a wide range of branded agricultural products.  Aside from its expansion in its China operations, Wilmar’s FY19 Annual Report highlighted the following global business expansions: 
 


A presence in 16 countries across Africa, and is the largest edible oils refiner and a leading oil palm plantation owner on the continent;
	A 50:50 joint venture with Adani Wilmar Limited (“AWL”)  in India, which is the largest refiner and producer of consumer pack edible oils in the country. AWL has expanded into rice and rice milling, as well as enhanced its consumer product offering;
	In Indonesia, Wilmar is continuing to expand its flour and rice milling, oleochemicals,  biodiesel,  refining and packaging  capacities in existing and new sites.
	In Malaysia, 2019 saw Wilmar complete
	the purchase of two palm oil refineries in Kuantan and Kuching and start construction of a new refinery and a specialty fats plant in Port Klang.
	In Vietnam, Wilmar maintains its leadership position in its core businesses including edible oils and soybean crushing while its new businesses such as rice, grains value-added processing and sauces are growing in domestic sales volume. Wilmar is also expanding its flour and rice milling capacity in Vietnam.
	In Myanmar, the edible oils packing plant and flour  mill commenced operation in Thilawa  in October 2019. Concurrently Wilmar has also begun the construction of a rice milling complex which, when completed, will be the largest in Myanmar, and are in the  process of acquiring another rice mill.
	Completed the acquisition of the balance 50% interest in Goodman Fielder from First Pacific Company Limited in December 2019, looking to expand operations in Australia, New Zealand, Papua New Guinea and the Pacific Islands.


 

Singapore lists 13 consumer non-cyclical stocks with a market capitalisation of more than S$100 million. The strongest performers of this group of 13 Singapore stocks since 9 June were Mewah International, Del Monte Pacific, ABR Holdings, QAF and Wilmar International. The five stocks averaged 27% total returns bringing their average 2020 year to 2 October total return to 9%.




			Non-Cyclical Consumer Stocks with Food Production/Processing Focus
			
			
			Code
			
			
			Mkt Cap S$M
			
			
			Total Return % Since 9 June 
			
			
			YTD Total Return %
			
			
			180 Day 

			Volatility

			%
			
			
			P/E

			(x)
			
		


			Wilmar International
			
			
			F34
			
			
			27,919
			
			
			14
			
			
			10
			
			
			43
			
			
			15
			
		


			Olam International
			
			
			O32
			
			
			3,995
			
			
			-14
			
			
			-27
			
			
			32
			
			
			7
			
		


			First Resources
			
			
			EB5
			
			
			1,943
			
			
			-15
			
			
			-34
			
			
			41
			
			
			14
			
		


			Golden Agri-Resources
			
			
			E5H
			
			
			1,802
			
			
			-10
			
			
			-37
			
			
			36
			
			
			16
			
		


			Fraser And Neave
			
			
			F99
			
			
			1,769
			
			
			-19
			
			
			-27
			
			
			31
			
			
			12
			
		


			Japfa
			
			
			UD2
			
			
			1,260
			
			
			-8
			
			
			9
			
			
			55
			
			
			5
			
		


			Bumitama Agri
			
			
			P8Z
			
			
			841
			
			
			4
			
			
			-38
			
			
			47
			
			
			10
			
		


			QAF
			
			
			Q01
			
			
			529
			
			
			18
			
			
			21
			
			
			36
			
			
			10
			
		


			Delfi
			
			
			P34
			
			
			413
			
			
			-17
			
			
			-29
			
			
			41
			
			
			13
			
		


			Mewah International Inc
			
			
			MV4
			
			
			398
			
			
			40
			
			
			11
			
			
			71
			
			
			8
			
		


			Del Monte Pacific
			
			
			D03
			
			
			241
			
			
			39
			
			
			7
			
			
			69
			
			
			N/A
			
		


			JB Foods
			
			
			BEW
			
			
			174
			
			
			9
			
			
			-5
			
			
			62
			
			
			6
			
		


			ABR Holdings
			
			
			533
			
			
			141
			
			
			23
			
			
			-3
			
			
			105
			
			
			57
			
		


			Average
			
			
			 
			
			
			 
			
			
			5
			
			
			-11
			
			
			52
			
			
			14
			
		


			Median
			
			
			 
			
			
			 
			
			
			4
			
			
			-5
			
			
			43
			
			
			11
			
		

 Source: SGX, Bloomberg, Refinitiv (Data as of 2 October 2020)



Food Producers Maintained Defensive Line From June Highs 

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2020-06/Capture_9.PNG' alt='japfa' />
 </figure>
 <div class='content-caption'>japfa</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
What drives Japfa CEO Tan Yong Nang out of bed every morning is the awareness that he is contributing – one way or the other – to the fight against hunger and malnutrition in Asia.

A 2019 report by UN agencies found that more than 20% of the region’s population – estimated at 3.5 billion – is grappling with moderate or severe lack of access to food.

“Japfa has a mission to feed emerging Asia,” Tan noted. “With China, India, Myanmar, Indonesia and Vietnam accounting for more than 40% of the global population, I’m glad to be able to contribute to the well-being of consumers, and play a small part in the efforts to end regional hunger.”

As a leading, pan-Asian industrialised agri-food company, SGX-listed Japfa Ltd provides consumers with safe and affordable animal proteins, ranging from poultry and beef, to pork, aquaculture and dairy products.

Headquartered in Singapore, it employs over 40,000 people across an integrated network of modern farming, processing and distribution facilities in Indonesia, Vietnam, Myanmar, India and China.

Prior to listing on SGX in August 2014, although diversified across different markets and proteins, Japfa was a poultry-focused, Indonesia-centric business. “Our ambition then was to further expand and strengthen a business that already spanned multiple markets and pillars, offering a range of animal proteins,” said Tan.

Since its listing, Japfa has successfully leveraged its diversification strategy by replicating its vertically integrated business model, which spans animal feed production and breeding farms in the upstream industry, milking and fattening farms in the mid-stream segment, as well as processing and distribution operations, which constitute the downstream sector.

The Group’s first pillar is poultry in Indonesia, where it continues to maintain a leadership position through its Indonesia-listed subsidiary, PT Japfa Comfeed Indonesia Tbk – one of the two largest producers of poultry in the country with robust market share and economies of scale. 
The second core pillar is its dairy operations in China, where Japfa is one of the leading producers of premium raw milk, with one of the highest milk yields in the market. In April 2020, Meiji Co Ltd agreed to buy 25% of Japfa subsidiary AustAsia Investment Holdings Pte Ltd for US$254.4 million in cash, further cementing Japfa’s position as an independent raw milk producer in China. The Group’s third pillar is its swine business in Vietnam.

Additionally, Japfa has poultry operations in Vietnam, India and Myanmar, as well as aquaculture and beef operations in Indonesia. It leverages on its quality raw materials to produce premium, mass-market dairy products under its Greenfields brand sold in markets across Asia, including Singapore, as well as packaged foods under its So Good brand, available in Indonesia.

Core Competencies

“To qualify as a pillar, a business should reach at least a US$1 billion valuation,” said Tan, who spent his early career in various roles ranging from statistician and economist, to investment analyst and fund manager.

“We have already achieved that with PT Japfa Comfeed Indonesia. The recent Meiji transaction in China is another indication of such valuation for our dairy business, and more are in the pipeline.”

That’s how Japfa will grow in size and scale, he added. “By embracing an integrated, industrialised approach to farming and food production across the entire value chain, and institutionalising each business division so as to gain leadership in market share, technology and expertise.”

This standardised approach also allows the Group to become one of the lowest cost producers in the industry. “Since agri-food producers have no control over raw material prices, the only way to survive and thrive, is to ensure your operating costs are the lowest among your competitors.”

“Don’t forget – in the land of the blind, the one-eyed man is king,” he quipped.

The Group’s diversification is built across its core competencies. “What do milk operations in China, poultry breeding in Indonesia, and pig farming in Vietnam have in common? The dynamics of all three are very different, but the underlying core competency is the same, which is livestock breeding,” Tan pointed out.

“We use superior breeds, and adopt a sophisticated approach to animal husbandry, animal health, nutrition and welfare – all of which reinforce the quality of our products and achieve high production yields.”

The Group also places a strong emphasis on biosecurity with stringent operating procedures, and has forged strategic alliances with global leaders in breeding research.

“If you have productive and healthy breeders, that’s more than half the battle won,” he noted. “And quality breeding operations are the linchpin of any expansion into new revenue streams, such as beef operations or aquaculture.”

However, the agri-food business will inevitably be subject to cycles, which in turn affect sales and profits. These cycles are determined by factors that include seasonality, government policies, as well as macroeconomic drivers, which impact consumer spending.

“Our diversification across five proteins and five countries cushions us against cyclicality in any one market or protein group,” he added.

And given the growing affluence of Japfa’s target middle- and lower-income consumer groups, it expects animal protein consumption to continue climbing.

According to USDA-Economic Research Service, Southeast Asia’s expanding populations, rapid urbanisation and growing disposable incomes are contributing to increased meat consumption, particularly poultry and pork.

The region’s poultry output surged 56% over the last decade to 9.2 million metric tonnes in 2018, and is forecast to reach 12.3 million metric tonnes by 2028. Likewise, pork production grew 23% between 2009 and 2018, and is projected to rise another 21% by 2028.

China’s per capita milk consumption doubled to 36 kg in 2018 from 18 kg in 2007, but it still stands at less than one-third the global average. The country’s per capita dairy intake will continue to rise, particularly in third- and fourth-tier cities, USDA-Economic Research Service data showed.

Stormy Seas

Looking back on his 13 years within the Group, the last six of which was at the helm as CEO, Tan gets a sense of satisfaction from witnessing Japfa’s steady growth – not only in terms of financial strength, but also in the Group’s ability to navigate choppy waters.

“Since our IPO, revenues have expanded by nearly a third to US$3.9 billion, while our EBITDA has nearly doubled to almost US$500 million,” he pointed out, referring to the Group’s earnings before interest, tax, depreciation and amortisation.

Through its diversification, Japfa has reduced earnings volatility. For the year ended 31 December 2019, it reported profit after tax and minority interests (PATMI) of US$120.0 million, up 19.5% year-over-year, as revenue gained 10.1% to US$3.9 billion.

The Group has also learnt key lessons from the oversupply in the Indonesian poultry industry in 2014 and 2015, as well as the African Swine Fever (ASF) outbreak in Vietnam in 2019. Despite these major down-cycles, Japfa has delivered healthy EBITDA every year.

“We’ve emerged stronger from all these challenges. Such events – if we are adaptive and able to respond quickly with the right measures – can give us a lead over competitors, and help us build on the foundation for our future.”

For instance, thanks to Japfa’s strict biosecurity and farm management protocols, it was able to contain the adverse impact of the ASF and capitalise on the rebound of swine fattening prices in Vietnam in the last quarter of 2019.

“Our strategy of building a swine breeding pyramid gave us the opportunity to replenish our swine breeding stock more quickly than the competition,” Tan recalled. “As a result, we were able to boost our share of the swine fattening market amidst shrinking supplies in the country.”

Nevertheless, one challenge the 59-year-old is keeping a close eye on is none other than COVID-19. 

“As Japfa provides an essential service by supplying staple proteins, largely to the domestic markets in which they are produced, our day-to-day operations have not, thus far, been materially impacted by the lockdowns,” Tan noted.

In particular, Japfa has seen a recovery in demand for raw milk in China. “With the general shortage of raw milk in the country, and as an independent raw milk producer, we’re poised to benefit,” he added.

In Vietnam, pork demand remains relatively stable after the substantial fall in pork supply post-ASF, due to culling. However, the situation in Indonesia remains fluid – the country’s partial lockdowns have reduced consumer spending and impacted poultry demand, leading to a continued decline in broiler prices.  

“As this pandemic is an unprecedented event, the ultimate impact cannot be estimated with any certainty. Against this backdrop, we’re focused on reducing costs and remaining efficient, as well as adjusting our investments and deploying our resources appropriately,” he added.

When Tan isn’t managing Japfa’s operations, he can be found with his son, 20, and daughter, 25. “I talk to them, and sometimes, I lecture them. But after a while, they get tired of hearing my voice, and all conversation grinds to a halt,” he laughed.

But one thing is clear: His children are encouraged to live by a code of ethics. “I’ve always taught them to be a good person, to treat others with respect, show empathy, and have integrity.”

“That’s how you develop and maintain your moral compass in this life.” Japfa Ltd

Headquartered in Singapore, Japfa is a leading vertically integrated agri-food company listed on SGX Mainboard since 2014. Established in 1971, the Group has grown into one of Asia’s leading low-cost producers of protein staples, including poultry, beef, dairy, as well as protein-based consumer products across fast-growing emerging Asian economies, such as Indonesia, China, India, Myanmar and Vietnam. Japfa embraces an integrated industrial approach to livestock and food production across the value chain. Its vertically integrated business model spans Feed and Breeding (upstream), Milking and Fattening (midstream), and Processing and Distribution of consumer products (downstream).

The company website is: <a href="http://www.japfa.com">www.japfa.com</a>. 
Click <a href="https://www2.sgx.com/securities/equities/UD2">here</a> for the company's StockFacts page. 
For the quarter ended 31 March 2020 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/PAI5U4SU4WTM27BG/Japfa%20Ltd%20Press%20Release%201Q2020.pdf">here</a>. About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link10">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="jennifer.t@sgx.com">jennifer.t@sgx.com</a>.

 
</body></html>


      
    
    japfa


What drives Japfa CEO Tan Yong Nang out of bed every morning is the awareness that he is contributing – one way or the other – to the fight against hunger and malnutrition in Asia.

A 2019 report by UN agencies found that more than 20% of the region’s population – estimated at 3.5 billion – is grappling with moderate or severe lack of access to food.

“Japfa has a mission to feed emerging Asia,” Tan noted. “With China, India, Myanmar, Indonesia and Vietnam accounting for more than 40% of the global population, I’m glad to be able to contribute to the well-being of consumers, and play a small part in the efforts to end regional hunger.”

As a leading, pan-Asian industrialised agri-food company, SGX-listed Japfa Ltd provides consumers with safe and affordable animal proteins, ranging from poultry and beef, to pork, aquaculture and dairy products.

Headquartered in Singapore, it employs over 40,000 people across an integrated network of modern farming, processing and distribution facilities in Indonesia, Vietnam, Myanmar, India and China.

Prior to listing on SGX in August 2014, although diversified across different markets and proteins, Japfa was a poultry-focused, Indonesia-centric business. “Our ambition then was to further expand and strengthen a business that already spanned multiple markets and pillars, offering a range of animal proteins,” said Tan.

Since its listing, Japfa has successfully leveraged its diversification strategy by replicating its vertically integrated business model, which spans animal feed production and breeding farms in the upstream industry, milking and fattening farms in the mid-stream segment, as well as processing and distribution operations, which constitute the downstream sector.

The Group’s first pillar is poultry in Indonesia, where it continues to maintain a leadership position through its Indonesia-listed subsidiary, PT Japfa Comfeed Indonesia Tbk – one of the two largest producers of poultry in the country with robust market share and economies of scale.  
The second core pillar is its dairy operations in China, where Japfa is one of the leading producers of premium raw milk, with one of the highest milk yields in the market. In April 2020, Meiji Co Ltd agreed to buy 25% of Japfa subsidiary AustAsia Investment Holdings Pte Ltd for US$254.4 million in cash, further cementing Japfa’s position as an independent raw milk producer in China. The Group’s third pillar is its swine business in Vietnam.

Additionally, Japfa has poultry operations in Vietnam, India and Myanmar, as well as aquaculture and beef operations in Indonesia. It leverages on its quality raw materials to produce premium, mass-market dairy products under its Greenfields brand sold in markets across Asia, including Singapore, as well as packaged foods under its So Good brand, available in Indonesia.

Core Competencies

“To qualify as a pillar, a business should reach at least a US$1 billion valuation,” said Tan, who spent his early career in various roles ranging from statistician and economist, to investment analyst and fund manager.

“We have already achieved that with PT Japfa Comfeed Indonesia. The recent Meiji transaction in China is another indication of such valuation for our dairy business, and more are in the pipeline.”

That’s how Japfa will grow in size and scale, he added. “By embracing an integrated, industrialised approach to farming and food production across the entire value chain, and institutionalising each business division so as to gain leadership in market share, technology and expertise.”

This standardised approach also allows the Group to become one of the lowest cost producers in the industry. “Since agri-food producers have no control over raw material prices, the only way to survive and thrive, is to ensure your operating costs are the lowest among your competitors.”

“Don’t forget – in the land of the blind, the one-eyed man is king,” he quipped.

The Group’s diversification is built across its core competencies. “What do milk operations in China, poultry breeding in Indonesia, and pig farming in Vietnam have in common? The dynamics of all three are very different, but the underlying core competency is the same, which is livestock breeding,” Tan pointed out.

“We use superior breeds, and adopt a sophisticated approach to animal husbandry, animal health, nutrition and welfare – all of which reinforce the quality of our products and achieve high production yields.”

The Group also places a strong emphasis on biosecurity with stringent operating procedures, and has forged strategic alliances with global leaders in breeding research.

“If you have productive and healthy breeders, that’s more than half the battle won,” he noted. “And quality breeding operations are the linchpin of any expansion into new revenue streams, such as beef operations or aquaculture.”

However, the agri-food business will inevitably be subject to cycles, which in turn affect sales and profits. These cycles are determined by factors that include seasonality, government policies, as well as macroeconomic drivers, which impact consumer spending.

“Our diversification across five proteins and five countries cushions us against cyclicality in any one market or protein group,” he added.

And given the growing affluence of Japfa’s target middle- and lower-income consumer groups, it expects animal protein consumption to continue climbing.

According to USDA-Economic Research Service, Southeast Asia’s expanding populations, rapid urbanisation and growing disposable incomes are contributing to increased meat consumption, particularly poultry and pork.

The region’s poultry output surged 56% over the last decade to 9.2 million metric tonnes in 2018, and is forecast to reach 12.3 million metric tonnes by 2028. Likewise, pork production grew 23% between 2009 and 2018, and is projected to rise another 21% by 2028.

China’s per capita milk consumption doubled to 36 kg in 2018 from 18 kg in 2007, but it still stands at less than one-third the global average. The country’s per capita dairy intake will continue to rise, particularly in third- and fourth-tier cities, USDA-Economic Research Service data showed.

Stormy Seas

Looking back on his 13 years within the Group, the last six of which was at the helm as CEO, Tan gets a sense of satisfaction from witnessing Japfa’s steady growth – not only in terms of financial strength, but also in the Group’s ability to navigate choppy waters.

“Since our IPO, revenues have expanded by nearly a third to US$3.9 billion, while our EBITDA has nearly doubled to almost US$500 million,” he pointed out, referring to the Group’s earnings before interest, tax, depreciation and amortisation.

Through its diversification, Japfa has reduced earnings volatility. For the year ended 31 December 2019, it reported profit after tax and minority interests (PATMI) of US$120.0 million, up 19.5% year-over-year, as revenue gained 10.1% to US$3.9 billion.

The Group has also learnt key lessons from the oversupply in the Indonesian poultry industry in 2014 and 2015, as well as the African Swine Fever (ASF) outbreak in Vietnam in 2019. Despite these major down-cycles, Japfa has delivered healthy EBITDA every year.

“We’ve emerged stronger from all these challenges. Such events – if we are adaptive and able to respond quickly with the right measures – can give us a lead over competitors, and help us build on the foundation for our future.”

For instance, thanks to Japfa’s strict biosecurity and farm management protocols, it was able to contain the adverse impact of the ASF and capitalise on the rebound of swine fattening prices in Vietnam in the last quarter of 2019.

“Our strategy of building a swine breeding pyramid gave us the opportunity to replenish our swine breeding stock more quickly than the competition,” Tan recalled. “As a result, we were able to boost our share of the swine fattening market amidst shrinking supplies in the country.”

Nevertheless, one challenge the 59-year-old is keeping a close eye on is none other than COVID-19. 

“As Japfa provides an essential service by supplying staple proteins, largely to the domestic markets in which they are produced, our day-to-day operations have not, thus far, been materially impacted by the lockdowns,” Tan noted.

In particular, Japfa has seen a recovery in demand for raw milk in China. “With the general shortage of raw milk in the country, and as an independent raw milk producer, we’re poised to benefit,” he added.

In Vietnam, pork demand remains relatively stable after the substantial fall in pork supply post-ASF, due to culling. However, the situation in Indonesia remains fluid – the country’s partial lockdowns have reduced consumer spending and impacted poultry demand, leading to a continued decline in broiler prices.  

“As this pandemic is an unprecedented event, the ultimate impact cannot be estimated with any certainty. Against this backdrop, we’re focused on reducing costs and remaining efficient, as well as adjusting our investments and deploying our resources appropriately,” he added.

When Tan isn’t managing Japfa’s operations, he can be found with his son, 20, and daughter, 25. “I talk to them, and sometimes, I lecture them. But after a while, they get tired of hearing my voice, and all conversation grinds to a halt,” he laughed.

But one thing is clear: His children are encouraged to live by a code of ethics. “I’ve always taught them to be a good person, to treat others with respect, show empathy, and have integrity.”

“That’s how you develop and maintain your moral compass in this life.”  Japfa Ltd

Headquartered in Singapore, Japfa is a leading vertically integrated agri-food company listed on SGX Mainboard since 2014. Established in 1971, the Group has grown into one of Asia’s leading low-cost producers of protein staples, including poultry, beef, dairy, as well as protein-based consumer products across fast-growing emerging Asian economies, such as Indonesia, China, India, Myanmar and Vietnam. Japfa embraces an integrated industrial approach to livestock and food production across the value chain. Its vertically integrated business model spans Feed and Breeding (upstream), Milking and Fattening (midstream), and Processing and Distribution of consumer products (downstream).

The company website is: www.japfa.com.  
Click here for the company's StockFacts page.  
For the quarter ended 31 March 2020 financial results, click here.   About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.

 







Real Estate, Manufacturing and Food &amp; Beverage stocks made up close to half of Singapore’s top 200 stocks by turnover in the first 5 months of 2019. The stocks representing tech–laden Manufacturing were the best performers in 2019 YTD and preceding two years, with F&amp;B the best performer in 2016. 
	 
	
Distinct drivers of the three sectors included interest rate outlooks and property prices for Real Estate, technological advancements, value chain integration and global trade for Manufacturing while incomes, tastes, preferences and tourism drove Food &amp; Beverage sales.  
	 
	
Real estate stocks showed the most consistency in returns, with the least standard deviation amongst the individual stock performances, followed by food &amp; beverage stocks, with the individual manufacturing stocks showing the most performance deviation in past years.  
	 
	Returns amongst the relevant 23 manufacturing stocks have been more constant in the 2019 YTD, with the 18% average total return generated by  19 gainers and four decliners, and a median total return of 19%. Hi-P Int, Frencken &amp; Sunpower led the manufacturers over the 23 weeks. 

As 2019 rapidly approaches the halftime mark of 30 June, clear drivers of investor sentiment in the year thus far have included concerns of global growth deceleration at home and abroad, resumption of trade frictions amongst the world’s two largest economies in early May, and a more dovish outlook for US interest rates.

In Singapore, the Straits Times index (“STI”) has generated  a total return of 6.8% in the 2019 year-to-date, in-line with the FTSE ASEAN All Share Index which has gained 7.4%. 

Looking beyond the STI, the 200 most actively traded stocks have generated an average total return of 8.0%. This does not include the average total returns of RHT Health Trust, Memtech International and Indofood Agri Resources which averaged 89.2% gains on premium cash offers for these businesses.

60 Real Estate Stocks Amongst Top 200 Stocks by Turnover 

Singapore’s strong property and infrastructure fundamentals have provided beachheads for Singapore’s listed Real Estate Sector. For the first five months of 2019, the 60 Real Estate stocks amongst the 200 most active traded stocks by turnover accounted for the most day-to-day market turnover, which was followed by Financial Services. As discussed recently (click here) this year Singapore REITs have attracted investment flows from global funds which has included private equity funds.

The 23 manufacturing stocks that were amongst the 200 stocks by turnover accounted for the most day-to-day turnover after the 11 financial services stocks. After Real Estate’s 60 stocks, the 23 manufacturing stocks led by the likes of Yangzijiang Shipbuilding, Venture Corporation and Singapore Tech Engineering, contributed the next most number of stocks in the top 200 by turnover. Note these manufacturing stocks do not include Food Manufacturers or Processors, and span diverse business from advanced electronics to healthcare products.

With Food and Beverage (“F&amp;B”) contributing 14 stocks to the top 200 by turnover, and the next highest number of stocks after Manufacturing, the three sectors of Real Estate, Manufacturing and F&amp;B together made up 97 stocks. This was close to half the top 200 stocks by turnover. The average total returns of the three genres of stocks over recent years are illustrated in the chart below. 

      
    
    Total Returns of Three Genres
The average total returns illustrated above were built on various levels of consistency across the performances of each of the Sector’s stocks. For instance, the 60 real estate stocks showed the most consistency, with the least standard deviation amongst the individual stock performances in all four time periods.

This was followed by F&amp;B, which saw more consistency in the performances across its relevant 14 stocks than Manufacturing over the past three years ending 2018. As noted above, Singapore manufacturing stocks span a wide range of industries, with the diversification exponentiated by the geographical reach of these businesses. This was a contributing factor to the individual manufacturing stocks showing the most performance deviation over the preceding three years.  However, in the 2019 year to date, performances across manufacturing stocks have seen marginally less deviation than the F&amp;B stocks. 

The comparative performances of the relevant stocks are tabled below, with each table sorted by stocks with the most turnover over the first five months of 2019.  The 60 real estate stocks maintain a combined market capitalisation of S$175 billion, the 23 manufacturing stocks maintain a total market capitalisation of S$35 billion and the 14 F&amp;B stocks maintain a total market capitalisation of S$60 billion. Note the designated F&amp;B stocks do not include Palm Oil producers.




			Real Estate
			
			
			Stock

			Code
			
			
			2016 TR %
			
			
			2017 TR %
			
			
			TR 2018 %
			
			
			2019 TR to 11 June %
			
		


			ASCENDAS REAL ESTATE INV TRT
			
			
			A17U
			
			
			4.6
			
			
			27.4
			
			
			0.3
			
			
			18.7
			
		


			CAPITALAND
			
			
			C31
			
			
			-7.2
			
			
			20.1
			
			
			-9.0
			
			
			13.4
			
		


			CAPITALAND COMMERCIAL TRUST
			
			
			C61U
			
			
			16.6
			
			
			42.1
			
			
			-5.0
			
			
			19.3
			
		


			CAPITALAND MALL TRUST
			
			
			C38U
			
			
			3.0
			
			
			19.5
			
			
			12.7
			
			
			16.3
			
		


			MAPLETREE LOGISTICS TRUST
			
			
			M44U
			
			
			10.8
			
			
			38.7
			
			
			1.5
			
			
			24.9
			
		


			HONGKONG LAND HOLDINGS
			
			
			H78
			
			
			-4.8
			
			
			5.5
			
			
			-6.1
			
			
			10.8
			
		


			CITY DEVELOPMENTS
			
			
			C09
			
			
			10.3
			
			
			53.1
			
			
			-33.8
			
			
			12.9
			
		


			SUNTEC REIT
			
			
			T82U
			
			
			13.2
			
			
			37.6
			
			
			-12.8
			
			
			9.5
			
		


			MAPLETREE COMMERCIAL TRUST
			
			
			N2IU
			
			
			14.9
			
			
			23.0
			
			
			7.6
			
			
			25.5
			
		


			UOL GROUP
			
			
			U14
			
			
			-1.5
			
			
			51.2
			
			
			-28.8
			
			
			18.7
			
		


			MAPLETREE NORTH ASIA COMMERC
			
			
			RW0U
			
			
			11.7
			
			
			38.3
			
			
			-1.1
			
			
			22.9
			
		


			KEPPEL REIT
			
			
			K71U
			
			
			17.0
			
			
			30.1
			
			
			-5.2
			
			
			11.3
			
		


			MAPLETREE INDUSTRIAL TRUST
			
			
			ME8U
			
			
			15.8
			
			
			32.2
			
			
			-0.7
			
			
			15.5
			
		


			FRASERS LOGISTICS &amp; INDUSTRI
			
			
			BUOU
			
			
			0.0
			
			
			34.0
			
			
			-4.2
			
			
			19.1
			
		


			KEPPEL DC REIT
			
			
			AJBU
			
			
			26.1
			
			
			27.0
			
			
			-0.7
			
			
			24.6
			
		


			FRASERS CENTREPOINT TRUST
			
			
			J69U
			
			
			9.1
			
			
			24.8
			
			
			2.2
			
			
			20.3
			
		


			ASCOTT RESIDENCE TRUST
			
			
			A68U
			
			
			2.4
			
			
			20.2
			
			
			-6.1
			
			
			22.6
			
		


			FRASERS COMMERCIAL TRUST
			
			
			ND8U
			
			
			7.0
			
			
			27.1
			
			
			-1.7
			
			
			17.7
			
		


			CDL HOSPITALITY TRUSTS
			
			
			J85
			
			
			8.7
			
			
			39.9
			
			
			-8.6
			
			
			13.6
			
		


			YANLORD LAND GROUP
			
			
			Z25
			
			
			33.1
			
			
			25.6
			
			
			-21.6
			
			
			7.9
			
		


			CAPITALAND RETAIL CHINA TRUS
			
			
			AU8U
			
			
			-1.0
			
			
			29.4
			
			
			-12.5
			
			
			16.3
			
		


			ESR-REIT
			
			
			J91U
			
			
			3.6
			
			
			12.0
			
			
			-1.8
			
			
			12.7
			
		


			CROMWELL EUROPEAN REIT
			
			
			CNNU
			
			
			0.0
			
			
			0.0
			
			
			-13.3
			
			
			16.0
			
		


			STARHILL GLOBAL REIT
			
			
			P40U
			
			
			4.7
			
			
			11.6
			
			
			-6.5
			
			
			13.7
			
		


			YING LI INTERNATIONAL REAL E
			
			
			5DM
			
			
			-10.2
			
			
			1.3
			
			
			-23.2
			
			
			20.7
			
		


			CACHE LOGISTICS TRUST
			
			
			K2LU
			
			
			-3.5
			
			
			19.0
			
			
			-12.2
			
			
			12.4
			
		


			FAR EAST HOSPITALITY TRUST
			
			
			Q5T
			
			
			-3.1
			
			
			27.9
			
			
			-10.8
			
			
			9.8
			
		


			MANULIFE US REAL ESTATE INV
			
			
			BTOU
			
			
			0.0
			
			
			18.3
			
			
			-7.2
			
			
			18.5
			
		


			ASCENDAS INDIA TRUST
			
			
			CY6U
			
			
			23.3
			
			
			19.1
			
			
			0.2
			
			
			27.7
			
		


			OUE HOSPITALITY TRUST
			
			
			SK7
			
			
			-1.1
			
			
			38.2
			
			
			-16.0
			
			
			6.6
			
		


			SASSEUR REAL ESTATE INVESTME
			
			
			CRPU
			
			
			0.0
			
			
			0.0
			
			
			0.0
			
			
			31.7
			
		


			OXLEY HOLDINGS
			
			
			5UX
			
			
			1.0
			
			
			71.9
			
			
			-44.7
			
			
			8.0
			
		


			SPH REIT
			
			
			SK6U
			
			
			5.4
			
			
			16.8
			
			
			0.6
			
			
			7.8
			
		


			APAC REALTY
			
			
			CLN
			
			
			0.0
			
			
			0.0
			
			
			-46.4
			
			
			27.8
			
		


			HONG FOK CORP
			
			
			H30
			
			
			-2.4
			
			
			38.2
			
			
			-19.9
			
			
			23.9
			
		


			ASCENDAS HOSPITALITY TRUST
			
			
			Q1P
			
			
			2.9
			
			
			30.8
			
			
			-3.6
			
			
			25.8
			
		


			LIPPO MALLS INDONESIA RETAIL
			
			
			D5IU
			
			
			27.3
			
			
			17.5
			
			
			-50.6
			
			
			28.6
			
		


			WING TAI HOLDINGS
			
			
			W05
			
			
			-6.1
			
			
			47.1
			
			
			-11.8
			
			
			5.2
			
		


			KEPPEL-KBS US REIT
			
			
			CMOU
			
			
			0.0
			
			
			0.0
			
			
			-23.9
			
			
			28.3
			
		


			FRASERS HOSPITALITY TRUST
			
			
			ACV
			
			
			-1.8
			
			
			29.3
			
			
			-4.7
			
			
			4.6
			
		


			AIMS APAC REIT
			
			
			O5RU
			
			
			3.4
			
			
			13.5
			
			
			3.9
			
			
			10.1
			
		


			ACCORDIA GOLF TRUST
			
			
			ADQU
			
			
			31.0
			
			
			17.0
			
			
			-21.1
			
			
			11.1
			
		


			OUE COMMERCIAL REAL ESTATE I
			
			
			TS0U
			
			
			14.6
			
			
			11.0
			
			
			-22.6
			
			
			9.3
			
		


			SOILBUILD BUSINESS SPACE REI
			
			
			SV3U
			
			
			-8.7
			
			
			14.2
			
			
			-6.2
			
			
			8.9
			
		


			OUE
			
			
			LJ3
			
			
			0.5
			
			
			8.2
			
			
			-22.2
			
			
			12.2
			
		


			FRASERS PROPERTY
			
			
			TQ5
			
			
			-1.2
			
			
			39.0
			
			
			-17.4
			
			
			15.1
			
		


			SABANA SHARIAH COMP IND REIT
			
			
			M1GU
			
			
			-33.5
			
			
			12.2
			
			
			6.8
			
			
			18.2
			
		


			TUAN SING HOLDINGS
			
			
			T24
			
			
			-10.6
			
			
			60.8
			
			
			-18.9
			
			
			2.3
			
		


			GUOCOLAND
			
			
			F17
			
			
			4.4
			
			
			28.1
			
			
			-16.3
			
			
			10.0
			
		


			EC WORLD REIT
			
			
			BWCU
			
			
			0.0
			
			
			8.0
			
			
			-1.2
			
			
			16.1
			
		


			DASIN RETAIL TRUST
			
			
			CEDU
			
			
			0.0
			
			
			0.0
			
			
			7.3
			
			
			5.4
			
		


			BUKIT SEMBAWANG ESTATES
			
			
			B61
			
			
			6.7
			
			
			47.1
			
			
			-7.0
			
			
			-1.4
			
		


			IREIT GLOBAL
			
			
			UD1U
			
			
			12.9
			
			
			17.3
			
			
			0.8
			
			
			8.1
			
		


			HO BEE LAND
			
			
			H13
			
			
			3.8
			
			
			24.3
			
			
			0.1
			
			
			4.5
			
		


			PROPNEX
			
			
			OYY
			
			
			0.0
			
			
			0.0
			
			
			0.0
			
			
			18.2
			
		


			UNITED INDUSTRIAL CORP
			
			
			U06
			
			
			-2.8
			
			
			20.6
			
			
			-16.8
			
			
			8.9
			
		


			FORTUNE REIT
			
			
			F25U
			
			
			17.5
			
			
			8.0
			
			
			-0.4
			
			
			23.6
			
		


			BOUSTEAD SINGAPORE
			
			
			F9D
			
			
			-0.6
			
			
			9.8
			
			
			-3.4
			
			
			-2.5
			
		


			SINGHAIYI GROUP
			
			
			5H0
			
			
			-13.4
			
			
			30.7
			
			
			-22.5
			
			
			11.8
			
		


			CENTURION CORP
			
			
			OU8
			
			
			-10.7
			
			
			65.9
			
			
			-16.5
			
			
			1.1
			
		


			Average:
			
			
			 
			
			
			4.1
			
			
			24.7
			
			
			-10.0
			
			
			14.7
			
		

 




			Manufacturing
			
			
			Stock

			Code
			
			
			2016 TR %
			
			
			2017 TR %
			
			
			TR 2018 %
			
			
			2019 TR to 11 June %
			
		


			YANGZIJIANG SHIPBUILDING
			
			
			BS6
			
			
			-22.3
			
			
			86.3
			
			
			-11.4
			
			
			19.2
			
		


			VENTURE CORP
			
			
			V03
			
			
			28.0
			
			
			115.4
			
			
			-29.1
			
			
			19.1
			
		


			SINGAPORE TECH ENGINEERING
			
			
			S63
			
			
			12.3
			
			
			5.0
			
			
			11.8
			
			
			20.3
			
		


			AEM HOLDINGS
			
			
			AWX
			
			
			195.3
			
			
			498.6
			
			
			1.5
			
			
			22.4
			
		


			SEMBCORP MARINE
			
			
			S51
			
			
			-19.3
			
			
			34.9
			
			
			-15.9
			
			
			-1.9
			
		


			HI-P INTERNATIONAL
			
			
			H17
			
			
			4.6
			
			
			326.5
			
			
			-50.8
			
			
			57.1
			
		


			VALUETRONICS HOLDINGS
			
			
			BN2
			
			
			34.3
			
			
			103.5
			
			
			-22.8
			
			
			-2.3
			
		


			SUNPOWER GROUP
			
			
			5GD
			
			
			57.4
			
			
			-11.6
			
			
			-27.6
			
			
			53.0
			
		


			CREATIVE TECHNOLOGY
			
			
			C76
			
			
			-11.9
			
			
			10.9
			
			
			254.2
			
			
			0.5
			
		


			FRENCKEN GROUP
			
			
			E28
			
			
			30.3
			
			
			132.4
			
			
			-18.9
			
			
			53.9
			
		


			HAW PAR CORP
			
			
			H02
			
			
			14.9
			
			
			27.2
			
			
			7.9
			
			
			18.8
			
		


			SUNNINGDALE TECH
			
			
			BHQ
			
			
			22.4
			
			
			83.6
			
			
			-21.9
			
			
			-2.8
			
		


			FU YU CORP
			
			
			F13
			
			
			27.2
			
			
			6.6
			
			
			10.1
			
			
			13.2
			
		


			SARINE TECHNOLOGIES
			
			
			U77
			
			
			20.9
			
			
			-42.4
			
			
			-52.0
			
			
			-29.2
			
		


			RIVERSTONE HOLDINGS
			
			
			AP4
			
			
			-25.0
			
			
			25.6
			
			
			7.9
			
			
			-17.9
			
		


			INNOTEK
			
			
			M14
			
			
			48.6
			
			
			32.7
			
			
			18.3
			
			
			30.0
			
		


			MANUFACTURING INTEGRATION TE
			
			
			M11
			
			
			-25.7
			
			
			48.3
			
			
			18.1
			
			
			22.0
			
		


			CHUAN HUP HOLDINGS
			
			
			C33
			
			
			-15.7
			
			
			37.5
			
			
			-3.7
			
			
			32.1
			
		


			JEP HOLDINGS
			
			
			1J4
			
			
			-31.0
			
			
			86.2
			
			
			-3.6
			
			
			12.6
			
		


			HANWELL HOLDINGS
			
			
			DM0
			
			
			-9.4
			
			
			31.3
			
			
			-43.6
			
			
			41.5
			
		


			MIYOSHI
			
			
			M03
			
			
			19.0
			
			
			62.8
			
			
			-39.6
			
			
			4.9
			
		


			AVARGA
			
			
			U09
			
			
			64.7
			
			
			1.8
			
			
			-23.4
			
			
			20.7
			
		


			HALCYON AGRI CORP
			
			
			5VJ
			
			
			-8.3
			
			
			-5.7
			
			
			-29.8
			
			
			24.4
			
		


			Average:
			
			
			 
			
			
			17.9
			
			
			73.8
			
			
			-2.8
			
			
			17.9
			
		

 




			F&amp;B
			
			
			Stock

			Code
			
			
			2016 TR %
			
			
			2017 TR %
			
			
			TR 2018 %
			
			
			2019 TR to 11 June %
			
		


			THAI BEVERAGE PCL
			
			
			Y92
			
			
			27.2
			
			
			11.3
			
			
			-31.7
			
			
			40.8
			
		


			WILMAR INTERNATIONAL
			
			
			F34
			
			
			25.0
			
			
			-12.1
			
			
			4.3
			
			
			10.8
			
		


			SATS
			
			
			S58
			
			
			30.9
			
			
			10.9
			
			
			-7.2
			
			
			8.2
			
		


			JAPFA
			
			
			UD2
			
			
			94.0
			
			
			-42.8
			
			
			44.6
			
			
			-19.6
			
		


			OLAM INTERNATIONAL
			
			
			O32
			
			
			12.2
			
			
			6.5
			
			
			-15.9
			
			
			15.7
			
		


			KOUFU GROUP
			
			
			VL6
			
			
			0.0
			
			
			0.0
			
			
			0.0
			
			
			14.8
			
		


			SINO GRANDNESS FOOD INDUSTRY
			
			
			T4B
			
			
			-33.8
			
			
			-8.9
			
			
			-38.2
			
			
			-61.0
			
		


			DELFI
			
			
			P34
			
			
			12.0
			
			
			-35.1
			
			
			-5.3
			
			
			-6.8
			
		


			QAF
			
			
			Q01
			
			
			37.8
			
			
			-16.4
			
			
			-45.0
			
			
			36.5
			
		


			JUMBO GROUP
			
			
			42R
			
			
			49.4
			
			
			-9.6
			
			
			-31.4
			
			
			1.7
			
		


			FRASER AND NEAVE
			
			
			F99
			
			
			2.8
			
			
			26.0
			
			
			-32.1
			
			
			4.4
			
		


			BREADTALK GROUP
			
			
			CTN
			
			
			5.4
			
			
			52.1
			
			
			-1.6
			
			
			-2.5
			
		


			JB FOODS
			
			
			BEW
			
			
			32.0
			
			
			69.2
			
			
			38.7
			
			
			11.3
			
		


			KIMLY
			
			
			1D0
			
			
			0.0
			
			
			0.0
			
			
			-30.6
			
			
			2.8
			
		


			Average:
			
			
			 
			
			
			21.1
			
			
			3.7
			
			
			-10.8
			
			
			4.1
			
		

Source: SGX StockFacts, Bloomberg (Data as of 11 June 2019). Note TR = Total Return which assumes dividends are reinvested.

Distinct drivers of the three sectors included interest rate outlooks and property prices for real estate, technological advancements, value chain integration and global trade for manufacturing while incomes, tastes, preferences and tourism drive F&amp;B sales.



Real Estate, Manufacturing and F&B Shares on the Move in 1H19    

<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
<ul>
<li>
In 1Q2019, Consumer Staples was the second-best performing sector with +13.9% total return, reversing the -2.9% total return in calendar year 2018. It was also amongst the top net buy sectors for the quarter, garnering total institutional inflows of S$61.5 million. 
	 </li>
	<li>
The 20 largest capitalised Consumer Staples stocks on SGX have a combined market cap of more than S$80 billion, and are well-diversified – both in terms of product range as well as geographical spread. The majority of these players report more than half their revenues to the Asia Pacific and/or global markets, excluding Singapore. 
	 </li>
	<li>Among the 20, the five best performers in the YTD were: Indofood Agri Resources (+46.6%), QAF Ltd (+44.4%), Thai Beverage PCL (+38.0%), Golden Agri-Resources (+20.4%), and First Resources (+19.5%). They averaged a YTD total return of +33.8%.</li>
</ul>
Second-Best Performing Sector in 1Q19

In the first quarter of 2019, Consumer Staples was the second-best performing sector on SGX with a total return of +13.9%, after Information Technology’s +28.6% total return. Consumer Staples’ strong performance in 1Q19 also reverses the -2.9% total return it generated in calendar year 2018.

Consumer Staples was also among the top net buy sectors for the January-March quarter, garnering total institutional inflows of S$61.5 million, according to SGX data. This comprised inflows of S$50.3 million, S$9.0 million, and S$2.2 million for January, February and March 2019 respectively.

Geographical Diversity

The 20 largest capitalised Consumer Staples stocks on SGX have a combined market cap of more than S$80 billion and are well-diversified – both in terms of product range as well as geographical spread. The majority of these players report more than half their revenues to the Asia Pacific and/or global markets, excluding Singapore.

In the 2019 year-to-date, these 20 largest Consumer Staples stocks have averaged a total return of +12.9%, bringing their one-year and three-year total returns to -1.4% and +22.6% respectively. They have also averaged a price-earnings ratio of 24.5x and a dividend indicated yield of 2.5%.

Among the 20, the five best performers in the YTD were: Indofood Agri Resources (+46.6%), QAF Ltd (+44.4%), Thai Beverage PCL (+38.0%), Golden Agri-Resources (+20.4%), and First Resources (+19.5%). They have averaged a YTD total return of +33.8%.

Note that earlier this month, Jakarta Stock Exchange-listed PT Indofood Sukses Makmur Tbk, controlled by Indonesian tycoon Anthoni Salim, offered S$0.28 per share to take Indofood Agri Resources private.

The table below details the 20 largest Consumer Staples stocks on SGX, sorted by YTD total return.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			SGX Code
			</td>
			<td>
			Market Cap (S$M)
			</td>
			<td>
			Total Return YTD (%)
			</td>
			<td>
			Total Return 1Y (%)
			</td>
			<td>
			Total Return 3Y (%)
			</td>
			<td>
			P/E (x)
			</td>
			<td>
			Div Ind Yld (%)
			</td>
		</tr>
<tr>
<td>
			INDOFOOD AGRI RESOURCES*
			</td>
			<td>
			5JS
			</td>
			<td>
			391
			</td>
			<td>
			46.6
			</td>
			<td>
			-10.5
			</td>
			<td>
			-49.0
			</td>
			<td>
			NA
			</td>
			<td>
			2.5
			</td>
		</tr>
<tr>
<td>
			QAF LTD
			</td>
			<td>
			Q01
			</td>
			<td>
			492
			</td>
			<td>
			44.4
			</td>
			<td>
			-14.4
			</td>
			<td>
			-9.3
			</td>
			<td>
			59.5
			</td>
			<td>
			5.9
			</td>
		</tr>
<tr>
<td>
			THAI BEVERAGE PCL
			</td>
			<td>
			Y92
			</td>
			<td>
			20,719
			</td>
			<td>
			38.0
			</td>
			<td>
			6.1
			</td>
			<td>
			27.9
			</td>
			<td>
			21.2
			</td>
			<td>
			2.0
			</td>
		</tr>
<tr>
<td>
			GOLDEN AGRI-RESOURCES
			</td>
			<td>
			E5H
			</td>
			<td>
			3,757
			</td>
			<td>
			20.4
			</td>
			<td>
			-15.4
			</td>
			<td>
			-26.9
			</td>
			<td>
			NA
			</td>
			<td>
			2.0
			</td>
		</tr>
<tr>
<td>
			FIRST RESOURCES
			</td>
			<td>
			EB5
			</td>
			<td>
			2,931
			</td>
			<td>
			19.5
			</td>
			<td>
			15.5
			</td>
			<td>
			0.8
			</td>
			<td>
			17.9
			</td>
			<td>
			1.9
			</td>
		</tr>
<tr>
<td>
			WILMAR INTL
			</td>
			<td>
			F34
			</td>
			<td>
			23,034
			</td>
			<td>
			17.3
			</td>
			<td>
			17.8
			</td>
			<td>
			11.1
			</td>
			<td>
			14.8
			</td>
			<td>
			2.9
			</td>
		</tr>
<tr>
<td>
			BUMITAMA AGRI
			</td>
			<td>
			P8Z
			</td>
			<td>
			1,251
			</td>
			<td>
			16.9
			</td>
			<td>
			4.8
			</td>
			<td>
			-6.8
			</td>
			<td>
			12.0
			</td>
			<td>
			3.8
			</td>
		</tr>
<tr>
<td>
			OLAM INTL
			</td>
			<td>
			O32
			</td>
			<td>
			6,094
			</td>
			<td>
			15.8
			</td>
			<td>
			-13.7
			</td>
			<td>
			22.7
			</td>
			<td>
			21.0
			</td>
			<td>
			3.9
			</td>
		</tr>
<tr>
<td>
			YEO HIAP SENG
			</td>
			<td>
			Y03
			</td>
			<td>
			568
			</td>
			<td>
			12.0
			</td>
			<td>
			-11.7
			</td>
			<td>
			-22.1
			</td>
			<td>
			47.3
			</td>
			<td>
			2.0
			</td>
		</tr>
<tr>
<td>
			MEWAH INTL
			</td>
			<td>
			MV4
			</td>
			<td>
			420
			</td>
			<td>
			10.0
			</td>
			<td>
			-4.7
			</td>
			<td>
			2.3
			</td>
			<td>
			20.6
			</td>
			<td>
			2.4
			</td>
		</tr>
<tr>
<td>
			DEL MONTE PACIFIC
			</td>
			<td>
			D03
			</td>
			<td>
			276
			</td>
			<td>
			8.8
			</td>
			<td>
			-39.6
			</td>
			<td>
			-54.0
			</td>
			<td>
			11.9
			</td>
			<td>
			NA
			</td>
		</tr>
<tr>
<td>
			FOOD EMPIRE HOLDINGS
			</td>
			<td>
			F03
			</td>
			<td>
			291
			</td>
			<td>
			6.7
			</td>
			<td>
			-15.1
			</td>
			<td>
			126.4
			</td>
			<td>
			12.2
			</td>
			<td>
			1.2
			</td>
		</tr>
<tr>
<td>
			JB FOODS
			</td>
			<td>
			BEW
			</td>
			<td>
			188
			</td>
			<td>
			4.8
			</td>
			<td>
			13.7
			</td>
			<td>
			224.7
			</td>
			<td>
			5.1
			</td>
			<td>
			3.3
			</td>
		</tr>
<tr>
<td>
			OLD CHANG KEE
			</td>
			<td>
			5ML
			</td>
			<td>
			96
			</td>
			<td>
			4.6
			</td>
			<td>
			8.8
			</td>
			<td>
			41.0
			</td>
			<td>
			18.6
			</td>
			<td>
			3.8
			</td>
		</tr>
<tr>
<td>
			DELFI LTD
			</td>
			<td>
			P34
			</td>
			<td>
			856
			</td>
			<td>
			4.5
			</td>
			<td>
			-6.3
			</td>
			<td>
			-41.6
			</td>
			<td>
			29.8
			</td>
			<td>
			1.6
			</td>
		</tr>
<tr>
<td>
			BREADTALK GROUP
			</td>
			<td>
			CTN
			</td>
			<td>
			476
			</td>
			<td>
			3.7
			</td>
			<td>
			-10.1
			</td>
			<td>
			79.3
			</td>
			<td>
			39.2
			</td>
			<td>
			1.8
			</td>
		</tr>
<tr>
<td>
			FRASER &amp; NEAVE
			</td>
			<td>
			F99
			</td>
			<td>
			4,131
			</td>
			<td>
			3.6
			</td>
			<td>
			-2.1
			</td>
			<td>
			64.3
			</td>
			<td>
			19.9
			</td>
			<td>
			2.5
			</td>
		</tr>
<tr>
<td>
			SHENG SIONG GROUP
			</td>
			<td>
			OV8
			</td>
			<td>
			1,579
			</td>
			<td>
			-1.9
			</td>
			<td>
			5.3
			</td>
			<td>
			32.9
			</td>
			<td>
			22.1
			</td>
			<td>
			3.3
			</td>
		</tr>
<tr>
<td>
			JAPFA LTD
			</td>
			<td>
			UD2
			</td>
			<td>
			1,287
			</td>
			<td>
			-5.5
			</td>
			<td>
			43.8
			</td>
			<td>
			2.6
			</td>
			<td>
			8.9
			</td>
			<td>
			0.7
			</td>
		</tr>
<tr>
<td>
			DAIRY FARM INTL
			</td>
			<td>
			D01
			</td>
			<td>
			14,320
			</td>
			<td>
			-11.4
			</td>
			<td>
			-0.5
			</td>
			<td>
			26.1
			</td>
			<td>
			116.3
			</td>
			<td>
			2.7
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			 
			</td>
			<td>
			 
			</td>
			<td>
			12.9
			</td>
			<td>
			-1.4
			</td>
			<td>
			22.6
			</td>
			<td>
			24.9
			</td>
			<td>
			2.5
			</td>
		</tr>
</tbody></table>
Source: Bloomberg &amp; StockFacts (data as of 22 April 2019)

*privatisation offer announced by parent

SGX lists more than 140 consumer stocks with a combined market capitalisation of over S$135 billion. More than 40 of these belong to the Consumer Staples sector, while the remainder are classified under the Consumer Discretionary segment. The retail and distribution of packaged foods and meats, production of agricultural goods, as well as beverage producers like soft drink makers and breweries, fall under the Consumer Staples sector.

Defensive Nature

Given the backdrop of slower global growth and increased macro risks, analysts have recommended investors to focus on sectors with robust balance sheets, stable earnings and decent valuations. In a <a href="https://api2.sgx.com/sites/default/files/2019-04/SG_Consumer_Sector%20Update_20190405_RHB.pdf">report</a> published earlier this month, RHB Research maintained its overweight rating on the Consumer space, pointing to “pockets of opportunities” in companies with strong attributes. “We continue to favour players with market exposure to the region that are likely to benefit from stronger GDP growth and higher domestic consumption,” the brokerage added.

Earlier this month, the International Monetary Fund (IMF) cut its global growth outlook to the lowest rate since the Global Financial Crisis, forecasting 3.3% growth in 2019, down from a 3.5% projection made in January. In its latest World Economic Outlook <a href="https://www.imf.org/en/Publications/WEO/Issues/2019/03/28/world-economic-outlook-april-2019">report</a>, the agency cited downside risks from ongoing global trade tensions, as well as a slowdown in several major economies, including the Eurozone, Latin America, the US and the UK.
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In 1Q2019, Consumer Staples was the second-best performing sector with +13.9% total return, reversing the -2.9% total return in calendar year 2018. It was also amongst the top net buy sectors for the quarter, garnering total institutional inflows of S$61.5 million. 
	 
	
The 20 largest capitalised Consumer Staples stocks on SGX have a combined market cap of more than S$80 billion, and are well-diversified – both in terms of product range as well as geographical spread. The majority of these players report more than half their revenues to the Asia Pacific and/or global markets, excluding Singapore.  
	 
	Among the 20, the five best performers in the YTD were: Indofood Agri Resources (+46.6%), QAF Ltd (+44.4%), Thai Beverage PCL (+38.0%), Golden Agri-Resources (+20.4%), and First Resources (+19.5%). They averaged a YTD total return of +33.8%.

Second-Best Performing Sector in 1Q19

In the first quarter of 2019, Consumer Staples was the second-best performing sector on SGX with a total return of +13.9%, after Information Technology’s +28.6% total return. Consumer Staples’ strong performance in 1Q19 also reverses the -2.9% total return it generated in calendar year 2018.

Consumer Staples was also among the top net buy sectors for the January-March quarter, garnering total institutional inflows of S$61.5 million, according to SGX data. This comprised inflows of S$50.3 million, S$9.0 million, and S$2.2 million for January, February and March 2019 respectively.

Geographical Diversity

The 20 largest capitalised Consumer Staples stocks on SGX have a combined market cap of more than S$80 billion and are well-diversified – both in terms of product range as well as geographical spread. The majority of these players report more than half their revenues to the Asia Pacific and/or global markets, excluding Singapore.

In the 2019 year-to-date, these 20 largest Consumer Staples stocks have averaged a total return of +12.9%, bringing their one-year and three-year total returns to -1.4% and +22.6% respectively. They have also averaged a price-earnings ratio of 24.5x and a dividend indicated yield of 2.5%.

Among the 20, the five best performers in the YTD were: Indofood Agri Resources (+46.6%), QAF Ltd (+44.4%), Thai Beverage PCL (+38.0%), Golden Agri-Resources (+20.4%), and First Resources (+19.5%). They have averaged a YTD total return of +33.8%.

Note that earlier this month, Jakarta Stock Exchange-listed PT Indofood Sukses Makmur Tbk, controlled by Indonesian tycoon Anthoni Salim, offered S$0.28 per share to take Indofood Agri Resources private.

The table below details the 20 largest Consumer Staples stocks on SGX, sorted by YTD total return.




			Name
			
			
			SGX Code
			
			
			Market Cap (S$M)
			
			
			Total Return YTD (%)
			
			
			Total Return 1Y (%)
			
			
			Total Return 3Y (%)
			
			
			P/E (x)
			
			
			Div Ind Yld (%)
			
		


			INDOFOOD AGRI RESOURCES*
			
			
			5JS
			
			
			391
			
			
			46.6
			
			
			-10.5
			
			
			-49.0
			
			
			NA
			
			
			2.5
			
		


			QAF LTD
			
			
			Q01
			
			
			492
			
			
			44.4
			
			
			-14.4
			
			
			-9.3
			
			
			59.5
			
			
			5.9
			
		


			THAI BEVERAGE PCL
			
			
			Y92
			
			
			20,719
			
			
			38.0
			
			
			6.1
			
			
			27.9
			
			
			21.2
			
			
			2.0
			
		


			GOLDEN AGRI-RESOURCES
			
			
			E5H
			
			
			3,757
			
			
			20.4
			
			
			-15.4
			
			
			-26.9
			
			
			NA
			
			
			2.0
			
		


			FIRST RESOURCES
			
			
			EB5
			
			
			2,931
			
			
			19.5
			
			
			15.5
			
			
			0.8
			
			
			17.9
			
			
			1.9
			
		


			WILMAR INTL
			
			
			F34
			
			
			23,034
			
			
			17.3
			
			
			17.8
			
			
			11.1
			
			
			14.8
			
			
			2.9
			
		


			BUMITAMA AGRI
			
			
			P8Z
			
			
			1,251
			
			
			16.9
			
			
			4.8
			
			
			-6.8
			
			
			12.0
			
			
			3.8
			
		


			OLAM INTL
			
			
			O32
			
			
			6,094
			
			
			15.8
			
			
			-13.7
			
			
			22.7
			
			
			21.0
			
			
			3.9
			
		


			YEO HIAP SENG
			
			
			Y03
			
			
			568
			
			
			12.0
			
			
			-11.7
			
			
			-22.1
			
			
			47.3
			
			
			2.0
			
		


			MEWAH INTL
			
			
			MV4
			
			
			420
			
			
			10.0
			
			
			-4.7
			
			
			2.3
			
			
			20.6
			
			
			2.4
			
		


			DEL MONTE PACIFIC
			
			
			D03
			
			
			276
			
			
			8.8
			
			
			-39.6
			
			
			-54.0
			
			
			11.9
			
			
			NA
			
		


			FOOD EMPIRE HOLDINGS
			
			
			F03
			
			
			291
			
			
			6.7
			
			
			-15.1
			
			
			126.4
			
			
			12.2
			
			
			1.2
			
		


			JB FOODS
			
			
			BEW
			
			
			188
			
			
			4.8
			
			
			13.7
			
			
			224.7
			
			
			5.1
			
			
			3.3
			
		


			OLD CHANG KEE
			
			
			5ML
			
			
			96
			
			
			4.6
			
			
			8.8
			
			
			41.0
			
			
			18.6
			
			
			3.8
			
		


			DELFI LTD
			
			
			P34
			
			
			856
			
			
			4.5
			
			
			-6.3
			
			
			-41.6
			
			
			29.8
			
			
			1.6
			
		


			BREADTALK GROUP
			
			
			CTN
			
			
			476
			
			
			3.7
			
			
			-10.1
			
			
			79.3
			
			
			39.2
			
			
			1.8
			
		


			FRASER &amp; NEAVE
			
			
			F99
			
			
			4,131
			
			
			3.6
			
			
			-2.1
			
			
			64.3
			
			
			19.9
			
			
			2.5
			
		


			SHENG SIONG GROUP
			
			
			OV8
			
			
			1,579
			
			
			-1.9
			
			
			5.3
			
			
			32.9
			
			
			22.1
			
			
			3.3
			
		


			JAPFA LTD
			
			
			UD2
			
			
			1,287
			
			
			-5.5
			
			
			43.8
			
			
			2.6
			
			
			8.9
			
			
			0.7
			
		


			DAIRY FARM INTL
			
			
			D01
			
			
			14,320
			
			
			-11.4
			
			
			-0.5
			
			
			26.1
			
			
			116.3
			
			
			2.7
			
		


			Average
			
			
			 
			
			
			 
			
			
			12.9
			
			
			-1.4
			
			
			22.6
			
			
			24.9
			
			
			2.5
			
		

Source: Bloomberg &amp; StockFacts (data as of 22 April 2019)

*privatisation offer announced by parent

SGX lists more than 140 consumer stocks with a combined market capitalisation of over S$135 billion. More than 40 of these belong to the Consumer Staples sector, while the remainder are classified under the Consumer Discretionary segment. The retail and distribution of packaged foods and meats, production of agricultural goods, as well as beverage producers like soft drink makers and breweries, fall under the Consumer Staples sector.

Defensive Nature

Given the backdrop of slower global growth and increased macro risks, analysts have recommended investors to focus on sectors with robust balance sheets, stable earnings and decent valuations. In a report published earlier this month, RHB Research maintained its overweight rating on the Consumer space, pointing to “pockets of opportunities” in companies with strong attributes. “We continue to favour players with market exposure to the region that are likely to benefit from stronger GDP growth and higher domestic consumption,” the brokerage added.

Earlier this month, the International Monetary Fund (IMF) cut its global growth outlook to the lowest rate since the Global Financial Crisis, forecasting 3.3% growth in 2019, down from a 3.5% projection made in January. In its latest World Economic Outlook report, the agency cited downside risks from ongoing global trade tensions, as well as a slowdown in several major economies, including the Eurozone, Latin America, the US and the UK.



Singapore’s Largest Consumer Staples Stocks Returned 34% in YTD

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Japfa is a multinational agriculture and food corporation specializing in producing protein staples such as poultry, swine, aquaculture, and beef, along with packaged food products. The company operates an integrated network of modern farming, processing, and distribution facilities across emerging Asia. Japfa was founded in 1971 and is headquartered in Singapore.

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