Growth stocks have performed well globally, led by the internet technology companies as well as “unicorns” (private companies with at least a US$1 billion valuation) in the US. Over in Singapore, the search is also ongoing for similar companies, albeit on a smaller scale. While the Singapore market is undoubtedly filled with smaller companies compared to the global reach of US conglomerates, such companies do displays encouraging signs of multi-year growth.
Here are three growth shares you can consider buying and holding forever, as there is a strong underlying thesis to each name along with favourable long-term catalysts.
1. iFast Corporation Ltd
iFast Corporation Ltd (SGX: AIY) is a financial technology company which develops and owns a platform for the sale and distribution of financial and investment products such as equities, bonds and unit trusts. Aside from Singapore, the group also operates in Malaysia, Hong Kong, India and China.
iFast earns revenue from the number of Assets Under Administration (AUA) parked in its accounts, for which is charges platform fees, wrap fees and trailer fees. These form a stable base of recurring earnings for the group as it continues to grow its functional capabilities and expand its platform to allow a wider variety of securities to be traded on it.
Growth thesis: There is still a long runway for growth for iFast as its current AUA of S$8.75 billion (as of 31 March 019) is still considered “low”. iFast has set a 10-year target to hit group AUA of S$100 billion by 2028, with a goal of S$35 billion for Singapore alone. CEO Lim Chung Chun has expressed cautious optimism in being able to grow AUA slowly but steadily as iFast taps on Asia’s appetite for investment.
2. SATS Ltd
SATS Ltd (SGX: S58) is a company providing food solutions and gateway services solutions. The food solutions business covers airline catering, food distribution, and industrial catering, while gateway solutions involves ground handling services of passengers, flights, and cargo.
Growth thesis: Steady growth in tourism numbers over the years for Singapore will continue to underpin growth for SATS. As more visitors visit Singapore due to the government’s tourism marketing initiatives, the gateway services division will benefit. The Singapore government is investing in Changi Airport’s Terminal 5, which will be ready by 2030 and would more than double existing airport capacity.
For Food Solutions division, SATS is targeting growth in three of Asia’s largest countries, namely India, China and Indonesia. The group has invested in central kitchens in China and established a strong presence in both India and Indonesia as it sees long-term growth potential in these emerging nations.
3. Raffles Medical Group Ltd
Raffles Medical Group Ltd (SGX: BSL), or RMG for short, runs hospital and healthcare services in Singapore. It also has a network of clinics in five countries and 14 cities. It also has two hospitals in China, one in Chongqing and another in Shanghai (under construction).
RMG has done very well in Singapore with its Raffles Hospital located in Bugis, and has opened an extension to this hospital recently and also a new Specialist wing called Raffles Specialist Centre in March 2019. However, the group has ambitious growth plans beyond Singapore’s shores.
Growth thesis: RMG had just opened a new hospital in Chongqing, China, after two years of construction. This is a greenfield project which required significant capital expenditure but which RMG was confident would do well. The other China hospital in Pudong, Shanghai, is currently under construction and is expected to begin operations in the second half of this year. Should these two hospitals perform well, CEO Loo Choon Yong does not rule out building even more hospitals in China in future.
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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 Royston Yang owns shares in iFast Corporation Ltd, SATS Ltd and Raffles Medical Group Ltd. The Motley Fool Singapore has recommended shares of iFast Corporation Ltd, SATS Ltd and Raffles Medical Group Ltd.