June 5

3 Under The Radar Stocks worth a Second Look

Covid-19 has wreaked havoc all over the world, causing millions of job losses and health concerns. Stock markets were not spared as industries significantly impacted by the virus were massacred in different ways.

With the recovery of some countries in the world, investors have started getting positive and pushing stock prices back up. During the positiveness, some stocks that are due to receive some attention have yet to receive the attention that they deserve.

We have scoured the Singapore exchange market and identified 3 stocks that are under the radar that you should take note of.

#1 Koufu Group Limited

Koufu’s business comprises two business segments – Outlet & Mall Management and F&B Retail. The ubiquitous brand of Koufu has been around since 2002, and sprawl across whole of Singapore. Koufu is known for providing food at economical prices situated in convenient locations.

The pandemic has caused companies to reduce headcounts, cut back on hiring and increasing days of no-pay leaves. According to CNA, unemployment rate in March rose from 2.3 to 2.4%. Bearing in mind that, that was the start of the circuit breaker and figures are likely to get worse across Q2.

Unemployment results in loss of disposable income which correlates with how people spend their money on necessities and luxuries. It is without a doubt that affected consumers will be more prudent on necessities spending. Koufu is bound to be a beneficiary of this change in lifestyle as it provides food at economical prices, which is in line with the change of consumer mindset.

As of the latest annual report, Koufu’s revenue increased by 6.1% to $237 million. Net profit increased by a praise-worthy 13.7% to $27.8million. Free cash flow was at an impressive $83.2 million. Cash balance is at $90.4 million, which will help it tide through the tough times.

Koufu last closed at $0.64, which values it at a P/E ratio of 13.03 and dividend yield of 3.85%.

#2 APAC Realty Limted

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APAC Realty Limited is a leading real estate services provider in Asia. The Group provides real estate brokerage services; franchise arrangements; and training, valuation and other ancillary services.

Hong Kong has been embroiled in turmoil since last year and recently riots have been fanned up again due to the securities law passed in Beijing. Hong Kong is slowly losing its stardom of being the financial hub in Asia.

Singapore has been the receiver of the investments moving out of Hongkong. A case in point, Business Times has reported that Chinese buyers have snapped up $20 million worth of apartments recently despite the lockdown at Marina One Residence.

APAC Realty, being a leading real estate service provider will likely receive a huge gain out of this shift in investment from the Chinese real estate investors.

As of the latest annual report, APAC’s revenue decreased by 13% to $365 million. Net profit decreased 43% to $13.9 million. Free cash flow was at an admirable $15.7 million. Cash balance is at $32 million, which is enough for it to maintain its operations.

APAC Realty last closed at $0.38, which values it at a P/E ratio of 9.63 and dividend yield of 5.26%.

#3 Penguin International

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Penguin International Limited is listed on SGX and it is a builder, owner and operator of aluminium high-speed craft.

Through a group of wholly owned, integrated subsidiaries, Penguin owns and operates a fleet of crewboats and passenger ferries, and design and build a variety of high-speed craft, including patrol boats, firefighting search-and-rescue vessels, and security vessels, at its shipyards in Singapore and Batam, Indonesia.

Freight market has plunged in Q12020 leading up to May, due to the lack of demand of goods/commodities/services. With the recent revival of economies across the world, demand has picked up again and so did the freight market.

Penguin is a leading market leader in the crewboats and crew/supply vessels. Penguin’s share of vessels built in 2017/18 was 60%, and the rebound in the market is likely to bolster the top and bottom line. Share price which has plunged from $0.71 at the start of the year, will likely see an upturn with the positive sentiments and the market leader position it has.

As of the latest annual report, Pengiun’s revenue increased by 27% to $136 million. Net profit increased substantially by 43% to $19.4 million. Free cash flow was at a good level of $9.2 million. Cash balance is at $25 million, which is sufficiently sustainable for it to maintain its operations.

Penguin last closed at $0.52, which values it at a P/E ratio of 5.84 and dividend yield of 3.40%.

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Tags

apac realty, Covid 19, Koufu, penguin international, under the radar


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