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Look Beyond Singapore If You Want To Make Money

I remember once sitting down to a plate of Char Kway Teow at a restaurant operated by Millennium & Copthorne Hotels. There’s nothing too remarkable about that, you might think….

…But the hotel was the Millennium Tara, which was located just a few steps away from Kensington High Street in the heart of central London. The rice noodles were as authentic as you would find at any Singapore hawker stall – lots of “wok hei”.

That was not my only encounter with a Singapore-run business abroad. Chinese restaurant Min Jiang, which is owned by Singapore’s Goodwood Group of Hotels, offers fine dining in London with an unparalleled bird’s-eye view of Hyde Park.

I also recall enjoying a sumptuous breakfast of kaya toast and two silky half-boiled eggs with a splash of dark soy sauce and a sprinkle of black pepper in Shanghai of all places. The cafe was run by Toast Box, which is owned by BreadTalk (SGX: 5DA).

On the buses

But it is not just food that Singapore companies excel at abroad. Metroline, which is owned by ComfortDelGro (SGX: C52), for instance, has a fleet of over 1,500 buses that ply the streets of London. They are almost as ubiquitous as ComfortDelGro subsidiary’s SBS buses in Singapore.

ComfortDelGro also has a significant taxi operation in China, plus a presence in Vietnam too. In fact, it generates as much revenue and profit outside of Singapore as it does within the Lion City.

So from food on the table to vehicles on the street, Singapore companies have ventured beyond their comfort zone at home to pastures afar.

None are more accomplished at that than Singapore Telecommunications (SGX: Z74). Its Australian operation, Optus, has been a wholly-owned subsidiary since the turn of the Millennium.

Today, Singtel also has stakes in telecom operators in Thailand, the Philippines, Bangladesh, Indonesia and India, which in turn has interests in many African countries.

Behind the wheel

We might, mistakenly, think of Jardine Cycle & Carriage (SGX: C07) as just a Singapore motor dealer. Admittedly, it does sell and provide after-sales service for Mercedes-Benz in Singapore. But it also has forecourts in Vietnam, Malaysia, Myanmar and Indonesia.

It also owns a strategic stake in Indonesia’s Astra, which accounts for almost 90% of its annual revenues. So, Jardine C&C can be thought of as an Indonesian conglomerate that also happens to sell cars in Singapore.

Point is, preconceptions can be dangerous when we invest.

In other words, we should avoid forming opinions before we have the full facts, especially if it is a result of bias, prejudice or misinformation. It is especially important not to have preconceived ideas about companies when we invest.

Building knowledge 

For instance, might think of CapitaLand (SGX: C31) as a key developer in Singapore’s Central Business District. We might not be aware that Singapore accounts for only around a-third of group revenues and profits. City Developments (SGX: C09) generates more revenues outside of Singapore than within.

To avoid preconceptions, we should dig deep into a company’s operations to fully appreciate its business. Peter Lynch once said: “Behind every stock is a company. Find out what it is doing“.

For instance, some people may be concerned that Singapore’s economy may lag that of other countries in the region. So, it is understandable why some may want to look elsewhere. But not if you know where to look.

Consider a company such as Sembcorp Industries (SGX: U96). Probably the first thing that comes to mind is offshore and marine, because of its association Sembcorp Marine (SGX: S51). It does, after all, own a 61% stake in the shipbuilder. But it is the utilities business that is the company’s main source of stable revenue and profits.

Blind faith

Investing should never be about blindly putting money into companies without first knowing what they do. Lines on a graph paper are not going to be of much help. Instead, it is about developing an edge.

Average investors can become experts in their own field and can pick winning stocks as effectively as professionals, simply by doing just a little research.

Investing is not rocket science. Nor is it about building complicated spreadsheets. Instead, it is, and it should be, about understanding the companies that we choose to put our money into.

A version of this article first appeared in the Straits Times. 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.

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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 Director David Kuo doesn’t own shares in any companies mentioned.