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Three Shares that Beat the Market Today

Investors must have fallen a little more in love with the stock market here in Singapore after all that Valentine’s Day celebrations over the weekend as the Straits Times Index (SGX: ^STI) is up 1% to 3,069 points today. It was a nice day for the blue chips as 25 of the index’s 30 constituents had made gains, while only four others had slipped.

Outside the index though, were other shares that did much better than it. Let’s check out some of them.

Shares of construction company Sino Construction (SGX: F3V) had jumped by 8.5% to S$0.255 after it revealed last Saturday (15 Feb 2014) that it would be acquiring all the shares of Sunny Cove for S$12 million from an individual named Hasan Sjafei.

Sunny Cove’s an investment holding company with a 19.9% stake in Ardilaun Energy Limited. The latter holds oil & gas assets that include a number of exploration wells in the Irish Sea as well as production wells in the Celtic Sea.

Sino Construction views the acquisition as giving it a “foothold in the oil & gas business” and will enable it to “further explore on other investment opportunities to diversify its existing business”. This is also a departure from the company’s main business activities, which are described in its 2012 annual report as being “principally engaged in building construction and civil engineering activities in Daqing City” in China.

Dukang Distillers Holdings (SGX: GJ8) gained 7% to S$0.23 despite posting a 93% fall in quarterly profits to RMB10 million. The baijiu (a Chinese alcoholic beverage generally made from grains like sorghum, rice, or wheat) maker, whose business is conducted predominantly in China, had announced its second quarter results last Friday.

For the three months ended 31 Dec 2013, Dukang’s sales dropped by 45% year-on-year to RMB403 million but that was still relatively better than its profits, which sunk by 93% as mentioned earlier.

The company had sent out a warning to investors on 5 Feb 2014 that its sales and profits were going to be ugly in its second quarter. And, Dukang was right. The company saw its revenue decline largely on the back of China’s recent austerity measures on the spending and gifting of luxury products. Some of Dukang’s premium baijiu brands saw “steep drop[s]” in sales volume as a result of that.

Zhou Tao, executive chairman and chief executive of Dukang, added that the company “believe that such [austerity] measure will not be lifted anytime soon.” Nonetheless, Dukang still believes that “demand for baijiu will remain resilient in the long run.”

The company plans to counteract this decline in demand with “aggressive advertisement and promotional activities” that will help place more focus on its mid-market products.

Chemoil Energy’s (SGX: AV5) shares were up 4.9% to S$0.32. The marine fuel supplier had released its full year results for 2013 last week, where its annual revenue dipped 5% to US$12.95 billion. Meanwhile, profits were down 32% to US$102 million from US$150 million a year ago. But, if profits from discontinued operations were stripped from 2012’s results, the US$150 million figure would become a loss of US$24 million, indicating much better performance from Chemoil in 2013.

Either way, Chemoil’s gross contribution per metric ton, “a key margin indicator” was up 22% to US$8.20 in 2013 and helped to make up for the decline in revenue.

Tom Reilly, the company’s chief executive, commented on the company’s results:

“This year, our profitability was driven by strong fuel operations in North America and by our global biodiesel business. Start-ups such as Chemoil Energy, which sells  diesel to the fracking industry in the U.S. have turned profitable and have begun to contribute to our success. The 22% improvement that we achieved in our GCMT reflects the hard work put in by our traders and senior management’s emphasis on business unit profitability. Our solid financial performance came despite losses in our marine business in Europe, where we have now restructured. In 2014 we will continue to build on the strong global businesses we have established.”

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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 writer Chong Ser Jing doesn’t own shares in any companies mentioned.