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The Industrial Sector – Industrial Goods & Services Part III

Construction logo In the previous article, we looked at the “Electrical & Electrical Equipment” and “Industrial Engineering” sector in the “Industrial Goods & Services” supersector.  In this article, we will delve into the last two sectors – the “Industrial Transportation” and “Support Services” sector.

Companies involved in the “Industrial Transportation” sector include operators of mail and package delivery services and providers of on-water transportation,  industrial railway transportation, logistics services, commercial trucking services. On the other hand, companies involved in the “Support Services” sector are providers of non-financial services to a wide range of industrial enterprises and governments such as of business or management training courses and employment services.

We will look at three such companies listed in SGX. The first two companies are involved in the “Industrial Transportation” sector while the last one is involved in the “Support Services” sector.

Company

Market Cap (S$’ M)

Net Profit Margin (%)

Return on Equity (%)

PE

Dividend Yield (%)

Singapore Post Limited

(SGX: S08)

2,426.1

20.7

42.6

17.8

4.9

SIA Engineering Company Limited

(SGX: S59)

5,246.0

23.6

20.7

19.4

4.6

Sound Global Limited

(SGX: E6E)

832.1

16.1

16.2

9.9

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

Singapore Post is a ubiquitous provider of domestic and international postal services, with a history dating back to 1819. It is amongst the favourite for yield-hungry investors as it has been a consistent dividend payer of 6.25 Singapore cents per share yearly. On 2nd September 2013, the company was in the finishing stages of acquiring EK Media, owns and operates a leading online sampling platform in Singapore called The Sample Store, which focuses on distributing product samples to end-consumers. The revenue for first quarter of 2013 (1Q 2013) went up by 6.5% over 1Q 2012, excluding contributions from new subsidiaries. Including contributions from these subsidiaries, the revenue grew by 32.8% to $201.3 million. However, the net profit was down 2% to $37.3 million.

SIA Engineering is a subsidiary of Singapore Airlines (SIA) and is a maintenance, repair, and overhaul (MRO) company that provides engineering services to the airlines. SIAEC has clientele from over 80 international carriers, including Cathay Pacific, United Airlines and Air Canada. SIAEC currently has 25 joint ventures and subsidiaries across nine countries. The joint ventures include that with engine-maker, Rolls-Royce, in-flight entertainment and communications maintenance and repair company, Panasonic Avionics and Pratt & Whitney, another engine-maker. For 1Q 2013, the revenue decreased $11.1 million or 3.7%, mainly due to lower material and fleet management revenue. Net profit was at $69.0 million, a decrease of 1.6% as compared to 1Q 2012.

Sound Global is a one-stop integrated water and wastewater treatment solutions provider in the People’s Republic of China. The company offers services covering the full value chain of the water and wastewater treatment industry — from the design and construction of water and wastewater treatment facilities, to the operation and maintenance of water and wastewater treatment facilities and the manufacture of water and wastewater treatment equipment. The revenue for the first half of 2013 increased by 24.5% to RMB 1.45 billion but the net profit decreased by 9.7% to RMB 174.6 million.

Other companies in the “Industrial Transportation” sector include Neptune Orient Lines Limited (SGX: N03) and CWT Limited (SGX: C14). A trust under the “Support Services” sector is K-Green Trust (SGX: LH4U).

This wraps up our coverage of the Industrial sector. The industrials sector can be said to be a backbone for any country. It creates lots of jobs but this sector is also highly prone to the vagaries of the economy.  Stay tuned for more sector coverage in the upcoming months!

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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.