What is Forbes Asia Best Under A Billion?
The Forbes Asia Best Under A Billion list, announced on Forbes’ website recognises 200 top-performing public companies with less than US$1 billion (S$1.38 billion) in yearly sales in the Asia-Pacific region. These companies would have consistent top and bottom line growth.
Forbes Asia measures the long-term performance of companies with annual sales above US$10 million and below US$1 billion from a database of over 20,000 listed firms in the Asia Pacific region. Making the list are the top 1% of all companies in terms of their track record in revenue, earnings per share, debt and average returns on equity.
This list tends to capture strong performers from industries who are doing well during the year and Forbes Asia noted that this year’s list highlights the shift to discretionary spending, as Covid-19 restrictions have eased across the Asia-Pacific.
The list is unranked and these are the 7 Singapore-based companies who have been named on the list. Of the 7 companies that made the list this year, 6 are listed companies in Singapore while Eggriculture is listed in Hong Kong.
7 Singapore firms in Forbes Asia Best under a Billion
1) UMS Holdings (SGX:558)
UMS Holdings Limited is a one-stop strategic integration partner providing equipment manufacturing and engineering services to Original Equipment Manufacturers (OEM) of semiconductors and related products. Products on offer include modular and integration system for original semiconductor equipment manufacturing. Headquartered in Singapore, the company has production facilities in Singapore, Malaysia and California, USA.
Looking at its financial performance for the last 5 years, UMS Holdings also has a strong track record of both top and bottom line growth.
In 2021, UMS increased its investment in Catalist-listed JEP Holdings to 72.2% from 29.5% in 2018 and 38.7% in 2019. The additional investment in JEP worked well as it allowed UMS to gain full control of JEP. JEP provided readily available manufacturing facilities in Singapore to support UMS’ strong customer order flows.
2) Grand Venture Technology (SGX: JLB)
GVT is a manufacturing solutions and service provider for the semiconductor, analytical life sciences, electronics and other industries, with operations in Singapore, Penang, Malaysia and Suzhou, China.
GVT’s customers are the OEMs in these industries and GVT provides a range of engineering, assembly, testing and product lifecycle management services for the manufacture of complex precision machining and sheet metal components and modules.
Looking at its financial performance for the last 4 years, GVT also has a strong track record of both top and bottom line growth.
Amid the Covid-19 restrictions and lockdowns over the past two years in Singapore, Malaysia and China where it operates, the Company had managed to successfully expand its capabilities, capacity and customer base. It also announced a couple of strategic acquisitions to further build up its capabilities as shown in the slides below.
3) Micro-Mechanics (SGX:5DD)
Micro-Mechanics designs, manufactures and markets high precision parts and tools used in process-critical applications for the semiconductor and other high technology industries. The company has been a strong beneficiary of the increased demand for semiconductors. The company has a range of product offerings across front and back-end processes, it is also well-positioned to gain from growth trends across the wafer fab, assembly and packaging, and semiconductor test equipment segments.
Micro-Mechanics also has a strong revenue track record in the last 5 years. In its current financial year, revenue reached a record S$60.5 million in 9M22, up 10.8% on the back of double-digit sales growth in the China, USA and Malaysia markets. For this 9M22 period, Micro-Mechanics’ net profit increased 5.0% to S$13.9 million on the back of this revenue growth.
4) Koda (SGX: BJZ)
Koda is a leading Original Design Manufacturer of furniture and has an established reputation as a style leader in the industry. This is the second time that Koda has been recognised by Forbes Asia as part of the Best Under A Billion, with the first time being in 2006. Similarly, it also has a good track record of revenue and profit growth as shown in the chart below.
It also announces its first ever collaboration with the Singapore Airlines in an upcycling project with re-imagined versions of the retired SIA aircraft cabin windows into a wall shelf as shown below.
5) Eggriculture Foods (HKG:8609)
Eggriculture produces and sells both fresh chicken eggs and processed egg products. The company recently posted a 48%increase in revenue to $22.1 million for the quarter ended June 30, on the back of an enlargement in customer base.
Looking at its financial performance for the last 5 years, Eggriculture also has a strong track record of both top and bottomline growth.
It has several planned expansions under way, with a quail egg farm to be operational in 2023. Of the 7 companies on the list, only Eggriculture was previously named in the 2021 and 2020 lists.
Eggriculture is one of more than 50 Singapore companies listed in Hong Kong.
6) Nordic Group (SGX: MR7)
Nordic Group is a global engineering solutions provider that provides project and maintenance services for industries such as marine, offshore oil and gas, petrochemical, pharmaceutical, semiconductor, infrastructure, public environment and security agencies.
In 2021, as business activities resumed to pre-pandemic levels along with a healthy momentum pick-up for both Project services (“PS”) and Maintenance services (“MS”). Revenue contribution from PS increased by 23% to S$48.4 million and revenue from MS surged by 32% to S$54.7 million.
In 2021, Nordic successfully acquired Starburst Holdings Limited (SGX:40D). Starburst specialises in design, fabrication, installation and maintenance of antiricochet ballistic protection systems for shooting ranges and tactical training mock-ups with clients mainly from Singapore and the Middle East. Starburst’s strength lies in the building of steel and concrete structures which can be applicable to the needs of the Nordic’s clients for lightweight and durable structures. Likewise, Nordic has solutions in electrical and instrumentation, thermal and acoustic insulation as well as scaffolding services that can bring improvements to Starburst’s current client facilities and future builds.
Looking at its financial performance for the last 5 years, Nordic is the only one on this list that had a lacklustre record but looking at a longer timeframe, this company shows why it made the list.
7) The Hour Glass (SGX: AGS)
The Hour Glass is a luxury watch retailer with a a combined network of 50 boutiques in the Asia Pacific region. Well known brands sold by The Hour Glass include Rolex and Patek Philippe.
It has done well in recent years due to the increased demand for luxury timepieces. With luxury timepieces increasingly being viewed as a liquid and mobile asset by collectors and aficionados alike, demand has shot through the roof despite the increased prices. The Hour Glass has been a key beneficiary of this trend, capturing growth from the momentum the economy reopening.
Similar to the other companies who made the list, The Hour Glass has a robust revenue & profit growth trajectory.
3 Singapore firms that should have made the list IMO
As the Forbes list is limited to public companies, we think companies like Boustead Singapore (SGX:F9D), iFAST Corporation (SGX:AIY) and ISDN (SGX:I07 / 1656:HK) are three stocks to look out for.
Similar to the stocks on the list, these three companies have a track record of revenue and profit growth which we have appended at the bottom of each brief.
1) Boustead Singapore (SGX:F9D)
Boustead is a global group of companies operating across Energy Engineering, Geospatial, Healthcare and Real Estate sectors. It has a listed real estate solutions arm Boustead Projects (SGX:AVM) and in 2018 it acquired WhiteRock Medical, a home and sleep care specialist that focuses on providing rehabilitation solutions for long term care.
2) iFAST Corporation (SGX:AIY)
iFAST is a wealth management fintech platform that serves three main business areas.
- Business-to-Consumer (B2C): FSMOne.com (previously “Fundsupermart”), a multi-product online wealth management platform that provides DIY investors access to a myriad of investment products.
- Business-to-Business (B2B): Provide financial products to over 540 financial advisories (FA) companies, financial institutions, and banks.
- Emerging Fintech Solutions / Business-to-Business-to-Consumer (B2B2C) Model: Equip its B2B clients and business partners with B2C Fintech capabilities along with customised Fintech solutions.
iFAST also recently acquired a digital bank in the UK, BFC Bank. We also previously covered iFAST here.
3) ISDN (SGX:I07 / 1656:HK)
ISDN offers a full range of advanced automation solutions and services ranging from motion control to precision components and engineering services to full machine and cloud solutions. ISDN is committed to sustainable industrial growth, and is helping to build Asia’s sustainable future through its dedicated clean industry solutions and its clean energy portfolio.
Closing statement
Companies who have made the list have a strong track record and come out in the top 1% of public companies with revenue under a billion when assessed on factors such as debt, sales and earnings per share growth and average returns on equity.
As firms with serious governance issues, questionable accounting, environmental concerns, management issues or legal troubles are excluded from consideration, this is a list of companies that have gone through a few filters. However, many of these companies have also seen its share price perform well, hence when looking at such companies from an investment perspective, we should first be aware of the existing valuations.
Alternatively, we could instead look for companies who are potential candidates as there may be undervalued gems.
