Singapore stocks, for better or worse, are better known for dividends than growth.
But I beg to differ.
Recently, The Straits Times and Germany-based global research firm, Statista, compiled a list of 75 of the fastest-growing companies in Singapore.
From there, we picked our favourite Singapore companies with future growth potential.
Here’s the full details.
If a company is part of the 5G revolution, its growth potential is sure to be huge.
According to the World Semiconductor Trade Statistics, global sales of semiconductors will hit US$452 billion by the end of this year.
Launching 5G across various applications on your smartphones, healthcare devices and even cars is mission-critical for many semiconductor manufacturers.
But what’s even more crucial is having every single chip inside these devices tested to make sure nothing fails.
That’s where AEM comes in.
The S$1.1 billion chip-testing company is one of Singapore’s fastest-growing companies.
At its heart, the business helps to design and test complex chips.
From 2017 to 2019, the company’s sales grew at an impressive 361% to hit S$323 million. That’s a 66% compounded annual growth rate.
During its latest 3Q2020 financial results, management expects its full year 2020 sales to hit around S$520 million, markedly higher than its previous year’s sales.
Unlike its customers who are big-time semiconductor manufacturers, AEM doesn’t need heavy capex to test and design chips.
As a result, AEM generates consistently strong free cash flow.
Its free cash flow turned from a negative S$2 million in 2016 and to a positive S$68 million in 2019.
You’ll probably agree with me when I say this business is capital-efficient.
The company’s return on shareholders’ equity (ROE) grew from 17% in 2016 to 47% in 2019.
It’s impressive that a small company like AEM is able to hold its own weight in the ultra-competitive semiconductor industry.
Boustead Singapore is a S$440 million infrastructure and property conglomerate. It develops industrial properties, logistics and manufacturing facilities.
Many crucial industrial facilities have been designed and built by Boustead Singapore’s real estate subsidiary Boustead Projects Limited (SGX: AVM).
For instance, industrial facilities in JTC Corporation, the Airport Logistics Park of Singapore and the Paya Lebar iPark were all key projects developed by this 193-year-old company.
Since the fiscal year 2017, Boustead Singapore’s sales have grown steadily from S$434 million to S$726 million.
That’s a 49% growth over the past three fiscal years.
But real estate isn’t its only money-making business.
Boustead Singapore also builds engineering system components like waste heat recovery units as well as water and wastewater treatment plants for big oil & gas, petrochemical and power industries.
Not only that, Boustead Singapore is also a big user of technology.
In fact, the company provides one of the world’s leading geographic information systems — Esri ArcGIS technology in Australia and South East Asia.
Geographic information systems give real estate developers the whole blueprint to assess and understand a particular land’s characteristics.
A detailed survey is made even before a property developer can build anything on that plot of land. The software can also be likened to a “smart mapping and location analytics” platform.
According to the Building and Construction Authority, construction projects are estimated to hit between S$25 billion and S$32 billion per year from 2022 to 2025. This gives a lot of visibility for Boustead Singapore to continue growing over the long-term.
iFast is a S$1.5 billion online financial supermarket.
The group sells a very popular investment product called unit trusts through its online platform, Fundsupermart.com.
Today, it’s one of Singapore’s fastest-growing businesses. Over the past four years, from 2016 to 2019, its sales grew from S$81 million to S$125 million.
During the Covid-19 pandemic last year, gross revenue for the first nine months of 2020 already hit S$122 million, a 33% growth compared over a year ago.
iFAST’s online platform makes it easy for everyday investors to pick from its massive library of 9,000 investment products including unit trusts, bonds, stocks and ETFs.
When you access the group’s website, every piece of information is immediately presented right in front of you.
What’s different about iFAST is its a huge digital disruptor.
You see, iFAST can offer what all banks and financial institutions do — selling financial products, insurance, moneylending, — except taking in deposits.
And iFAST does all these without ever opening a single physical branch.
This asset-light approach allows iFAST to be highly efficient with its capital.
During its latest financial year results, its trailing 12-month free cash flow jumped to S$22 million.
The tailwinds of accelerated digital adoption and low interest rates will continue to push iFAST’s assets under administration (AUA) higher in future. In fact, the company recently reported its AUA hit another record high to S$14.5 billion as of Dec 2020. That’s a 44.5% year-on-year growth.
These fast-growing companies have a long growth runway.
The industries they are in are still growing despite the pandemic.
As investors who are building wealth for the long term, these are definitely companies worth looking at.
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Disclaimer: Willie Keng does not own shares in any of the companies mentioned.