When working on an investment thesis, investors should be sure to consider the three key areas of moat, catalysts, and risks. While a company with a strong competitive moat may be able to generate great returns for a while, it still needs to have sufficient catalysts to propel its growth to the next level. Remember that a business that stays stagnant will eventually be overtaken by its competitors, and its moat may also be gradually eroded.
The topic of catalysts got me thinking about stocks that have clear catalysts that give them bright future prospects in 2020 and how these will lead to the next stage of growth for the business. It’s important to have clear, definable catalysts, because otherwise, investors cannot easily understand what management is planning.
With that, here are three Singapore-listed shares with great catalysts for 2020 and beyond.
1. iFast Corporation Limited
iFast Corporation Limited (SGX: AIY) is a financial technology (fintech) company that owns a platform for the buying and selling of securities such as equities, fixed income, and unit trusts. The group has assets under administration (AUA) of S$9.04 billion as of 30 June 2019 and operates in Singapore, Malaysia, Hong Kong, India, and China.
With the recent announcement of the Monetary Authority of Singapore (MAS) planning to allow five digital bank licenses, iFast has thrown its hat into the ring by announcing that it would like to apply for a Singapore digital bank license.
Management believes the license will be able to enhance its standing as non-bank financial institution and allow it to accept deposits and make loans to clients. The granting of the license may be a strong catalyst for the growth of its future AUA, and this license will only be announced in 2020, when all the applicants have submitted their interest.
2. Raffles Medical Group Ltd
Raffles Medical Group Ltd (SGX: BSL) is an integrated private healthcare provider. The group owns the flagship Raffles Hospital in Singapore, a new hospital in Chongqing China that opened in January this year, and a third, under-construction hospital in Shanghai. RMG also has one of the largest networks of clinics with private family medicine and health screening centres in Singapore.
With RMG’s new 700-bed hospital in Chongqing up and running, efforts are now underway to ramp up operations. CEO Loo has mentioned that each hospital in China should take around three years to break even, and 2020 will be a crucial year to assess if the Chongqing hospital is on track to reduce its operating losses.
Another catalyst for the group will be the opening of the 400-bed Raffles Hospital Shanghai in Pudong slated for Q1 2020. The opening of these two hospitals will represent the next leg of growth for RMG as it seeks to expand outside of Singapore.
3. Straco Corporation Limited
Straco Corporation Limited (SGX: S85) operates tourism assets. The group owns two aquariums in China (Shanghai and Xiamen) as well as a 90% stake in the Singapore Flyer, a giant observation wheel overlooking scenic attractions in Singapore. Straco also owns the Lixing Cable Car attraction in Xi’An and the rights to develop Chao Yuan Ge.
The group is currently constructing a new attraction called the Time Capsule within the Singapore Flyer compound. This secondary attraction is part of Singapore’s Bicentennial Celebration and will feature an interactive showcase of Singapore’s history.
Straco hopes to be able to attract more locals to visit the Flyer with the development of this new attraction, and it will be a permanent fixture that should open in Q4 2019 and stretch into 2020. Hopefully, the new attraction will bring in more visitors to the Flyer and increase Straco’s revenue and profit from this asset.
Want to better understand how to benefit from the investing landscape here in Singapore? Click here now for your FREE subscription to The Motley Fool’s investing newsletter. 'Take Stock' lets you know exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead here
The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of iFast Corporation Limited, Raffles Medical Group Ltd, and Straco Corporation Limited. Motley Fool Singapore contributor Royston Yang owns shares in iFast Corporation Limited, Raffles Medical Group Ltd, and Straco Corporation Limited.