New companies present new opportunities for investors.
But not all of them will do well.
These stocks go public during initial public offerings, or IPOs, thus broadening the range of companies that investors can choose from.
In March last year, we wrote about three newly-listed Singapore stocks that had made their debut.
They are — Nanofilm Technologies International Ltd (SGX: MZH), Credit Bureau Asia (SGX: TCU), or CBA, and G.H.Y. Culture and Media Holding (SGX: XJB), or GHY.
All three IPOs met with an enthusiastic response last year.
Nanofilm’s shares were 19 times oversubscribed, CBA’s retail offer was 60.8 times oversubscribed, while GHY’s public tranche was 16 times oversubscribed.
Let’s take a look at these three companies one year later to see how their business has fared.
Nanofilm Technologies
Nanofilm’s shares have been on a roller coaster ride.
The engineering company’s IPO was priced at S$2.59 and its shares rose as high as S$6.53 in July last year before tumbling back down to near its IPO price again.
Nanofilm’s shares first took a sharp tumble back in August when it released the first half of 2021 results that were worse than expected.
Net profit dipped by 3.1% year on year even though revenue jumped by 24.2% year on year.
Back then, the resignation of the group’s CEO and COO within a space of two months further spooked investors.
For its fiscal 2021 (FY2021), Nanofilm delivered a creditable performance.
Revenue increased by 13% year on year to S$246.7 million while net profit rose by 8% year on year to S$62.2 million.
However, Nanofilm reported negative free cash flow for both FY2020 and FY2021 as it invested in its new Shanghai plant 2 along with equipment additions.
A final dividend of S$0.01 was declared, taking the total FY2021 dividend to S$0.02.
The group is confident of driving growth with the completion of its Shanghai Plant 2 and intends to embrace Industry 4.0 standards to upgrade its facilities to “Smart Factories” by investing in automation and digitalisation to reduce labour costs.
Credit Bureau Asia
CBA has fared slightly better than Nanofilm, with its share price still hovering at 9.7% above its IPO price of S$0.93.
Revenue for FY2021 inched up 4.6% year on year to S$45.4 million while net profit increased by 14.6% year on year to S$7.8 million.
Slightly more than half of the revenue came from the group’s non-fixed income (FI) division, while the FI division took up the remaining 44% of revenue.
The bulk of the group’s revenue still came from Singapore (97%) with Malaysia contributing the remaining 3%, but CBA has also made inroads into Cambodia and Myanmar in FY2021.
CBA generated a healthy free cash flow of S$16.8 million for FY2021, although it was down 12.2% year on year from FY2020’s S$19.2 million.
The group declared a final dividend of S$0.017, bringing the FY2021 dividend to S$0.034.
At S$1.02, CBA’s shares offer a trailing dividend yield of 3.3%.
Management remains optimistic about the group’s outlook as the emergence of digital banks and buy-now-pay-later (BNPL) services have increased business opportunities for CBA.
CBA has also entered the Vietnam market in partnership with FiinGroup and is in discussions with the four successful Singapore digital bank licence holders.
G.H.Y. Culture and Media
GHY’s shares have tumbled close to 35% from its IPO price of S$0.66 per share as the group grapples with disruptions to its business arising from COVID-19.
In FY2021, the group had postponed highly-anticipated concerts and also had a lighter-than-normal content slate for TV programmes and film production due to pandemic-induced delays.
As a result, revenue tumbled by 34% year on year to S$83.3 million while net profit plunged by 90% year on year to S$3.9 million.
As a result, GHY declared a final dividend of S$0.0010, significantly lower than the total dividend of S$0.0217 paid out in FY2020.
The group continues to invest in high-value post-production capabilities by building a 5G content technology hub in Singapore.
It has embarked on a five-year roadmap to enhance and scale its visual effects capabilities across 3D assets, animation, rendering and post-processing.
GHY has also maintained a small team that has the flexibility to ramp up concert production once the green light is given for the resumption of concerts.
Meanwhile, the group is busy identifying and promoting talent across Southeast Asia and growing its pool of artists in both Singapore and China.
These initiatives puts GHY in a good position to capture the recovery once activities resume as the pandemic eases.
Is now a good time to buy into Singapore REITs? After all, almost 50% of the 44 Singapore REITs were trading close to their 52-week lows in January.
But with the right strategy, mindset and stocks, REITs can still be a powerful source of dividends today and in the years ahead.
And in our upcoming (free) webinar, let us help you further. We’ll show you why REITs remain as one the best retirement assets, where to find resilient REITs that continue to grow and pay dividends, and how to tell if a REIT is worth a spot in your portfolio.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
