Singapore stocks preview: Sembcorp Industries, Wilmar, Top Glove

SGX-ST mainboard stocks for investors to note for the week of 21 September 2020.

Sembcorp Industries (SGX: U96)

Sembcorp Industries kickstarted the week with the launch of the Sembcorp Energy for Good Fund.

The initiative aims to support community development with an initial injection of S$1.5 million by the energy group.

This year, over S$1 million will be used to provide relief to social sector and migrant workers - so as to ensure essential services can continue amid the Covid-19 pandemic.

The Sembcorp Energy for Good Fund will also provide grants totalling S$350,000 to 35 eligible charities. Each S$10,000 grant will help to cover the charity’s utilities expenses for between six and 12 months on average, depending on usage.

Sembcorp and The Community Foundation of Singapore have also provided mobile phone SIM card top ups to approximately 20,000 migrant workers, to help them stay connected with their loved ones back home.

In addition, Sembcorp is partnering the National Trades Union Congress (NTUC) to disburse S$500,000 to essential workers in the energy, water, waste and environmental services. Some 2,500 eligible union members will each receive a one-time S$200 cash token.

Sembcorp Industries share price rose 3.01% within the first 90 minutes of trading on Monday 21 September 2020. As at 10:20 SGT, shares are trading at S$1.30 a share.

Wilmar International (SGX: F34)

Crude palm oil producer Wilmar International announced last week that its Chinese subsidiary Yihai Kerry Arawana has received final registration approvals for an initial public offering (IPO) on the Shenzhen Stock Exchange ChiNext Board from the China Securities Regulatory Commission (CSRC).

Listing will be by way of new shares to be issued by YKA, accounting for not less than 10% of YKA’s issued share capital on an enlarged basis, Wilmar stated in a press release.

Strategic investors, which include mainly state-owned funds, sovereign wealth funds and insurance companies, have been identified to subscribe for approximately 30% of the IPO shares.

Based on the usual IPO timeline, it is expected that the listing will take place by mid October 2020, subject to market conditions.

Although final registration approval for listing on the SZSE ChiNext Board by the CSRC has been obtained, there is no certainty that the proposed listing will proceed as the proposed listing is still subject to prevailing market conditions.

Wilmar shares opened at S$4.39 each on Monday 21 September 2020, rising to S$4.43 thirty minutes later.

The stock currently has an average rating of ‘buy’ and 12-month target price of S$5.13 from 14 brokers polled by Bloomberg.

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Sunpower Group (SGX: 5GD)

Energy solutions provider Sunpower Group has secured a Manufacturing & Services tender worth more than RMB150 million from Sinopec Group, one of the largest integrated energy and chemical companies in China.

Sinopec is a recurrent customer of Sunpower Group.

Under terms of the tender, Sunpower Group will manufacture and supply two types of LNG vaporizers, namely Submerged Combustion Vaporizers (SCV) and seawater Intermediate Fluid Vaporizers (IFV), for Sinopec’s large LNG receiving terminal in Shandong province.

Delivery of the contract is expected to be completed by the 2021 financial year. It is also expected to have a positive impact on the group’s financial performance in FY2020 and FY2021.

Sunpower Group opened slightly higher this week at S$0.55 a share. The stock has a majority ‘buy’ rating and average target price of S$0.92 from three analysts polled by Bloomberg.

Top Glove Corporation (SGX: BVA)

Top Glove Corporation has posted record high sales revenue and net profit for its final quarter of fiscal 2020.

The Malaysian glove manufacturer, listed on the SGX and Bursa Malaysia bourses, saw sales revenue hit 3.11 billion Malaysian ringgit (S$1.02 billion) for the quarter ended 31 August 2020, up 162% year-on-year.

Profit After Tax came in at 1.33 billion ringgit (S$439 million), 18 times higher than that registered in the corresponding period a year ago.

In light of the strong performance, the company’s board recommended a final dividend of 0.085 ringgit (S$0.28) per share, amounting to a payout of approximately 691.8 million ringgit (S$228 million).

This brings the total FY2020 dividend payout to S$0.118 per share (S$0.039), amounting to a total payout of approximately 961.2 million ringgit (S$317 million).

The FY2020 dividend amount represents a 373% increase over FY2019’s sum, also amounting to a net profit payout ratio of 51%.

Top Glove’s SGX shares rose 2.7% within minutes of the market opening on Monday 21 September 2020. The stock has an average target price of S$3.42 and ‘buy’ rating, based on the latest Bloomberg poll results.

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