MENU

The Industrial Sector – Industrial Goods & Services Part II

Construction logo As earlier articles of this Sector Connect series, we gave an overview of the industrial sector, talked about the “Construction and Materials” supersector, and started on the “Industrial Goods and Services” supersector.  In this article, we will delve into the “Electrical & Electrical Equipment” and “Industrial Engineering” sector.

As its name suggests, companies involved in the “Electrical & Electrical Equipment” sector are makers and distributors of electrical equipment such as printed circuit boards, transistors, and electrical adaptor. Companies involved in the “Industrial Engineering” sector are manufacturers and distributors of commercial vehicles, heavy agricultural and construction machinery, non-military ships, and industrial machinery.

We will look at three such companies listed in SGX. The first company is involved in the “Electrical & Electrical Equipment” sector while the other two are from the “Industrial Engineering” sector.

Company

Market Cap (S$’ M)

Net Profit Margin (%)

Return on Equity (%)

PE

Dividend Yield (%)

Venture Corporation Limited

(SGX: V03)

2,063.8

5.8

7.8

14.8

6.6

Sarin Technologies Limited

(SGX: U77)

513.7

32.6

37.0

20.3

3.7

Yangzijiang Shipbuilding Holdings Limited

(SGX: BS6)

3,582.8

24.2

23.1

5.1

5.3

(As of time of writing on 3rd September 2013)

Venture is a global provider of technology services, products and solutions with capabilities spanning marketing research, design and development, product and process engineering, design for manufacturability, supply chain management. For the first half of 2013, Venture saw a revenue dip of 5.7% to $1.1 billion as compared to the previous year. The net profit was down 16% to $85.5 million. The company attributed the decline in net profit mostly to higher income tax provision.

Sarin is involved in the development and manufacturing of diamond cut grading tools, rough diamond optimization systems, gemology tools, diamond color grading and laser marking machines. Their products are used from diamond manufacturers to retailers. For the first quarter of 2013, it posted a record revenue of US$20.2 million and a record net profit of US$8.1 million. Robust demand for polished diamonds by the growing middle classes in China and India bodes well for the company. The company generated 77% of its Financial Year 2012 revenue in India.

Yangzijiang is a China’s second-biggest shipyard by market capitalisation, with a history stretching back as to 1956 in shipbuilding. It became the first shipbuilding enterprise from China to be listed in SGX. For the second quarter of 2013 (2Q 2013), the revenue increased 12% to RMB 4.4 billion mainly due to higher revenue recognition from construction of larger vessels over 2Q 2012. The net profit, however, was down 8% to RMB 811.7 million as compared to the previous year because of lower gross profit margins, decline in other income and net other gains, and a higher effective tax rate. On 5th August 2013, Yangzijiang became the first company in SGX to introduce trading of its shares in RMB using SGX’s dual currency trading platform.

Another company in the “Electrical & Electrical Equipment” sector includes Elec & Eltek (SGX: E16). Other companies in the “Industrial Engineering” sector include Tat Hong Holdings Limited (SGX: T03) and Cosco Corporation (SGX: F83).

Stay tuned for the next and last article of the Sector Connect – Industrial Sector series!

Click here now  for your   FREE   subscription to   Take Stock  Singapore, The Motley Fool’s free investing newsletter. Written by   David Kuo ,   Take Stock Singapore   tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

Like us on Facebook   to keep up-to-date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.