Growth investing involves putting money down on businesses that demonstrate growth in both profits and cash flows.
As these businesses become more valuable, their share prices should also increase in tandem, netting the investor capital gains.
Growth, however, may come in spurts and is usually not even as a business takes time to sift out opportunities or build additional factories.
Hence, you should track a business for regular corporate developments.
These developments highlight management’s efforts in growing the business and improving its top and bottom lines.
We present three Singapore stocks with interesting business developments that you can monitor this month.
Raffles Medical Group (SGX: BSL)
Raffles Medical Group, or RMG, is an integrated healthcare provider that operates in 14 cities in five countries in Asia.
Its network includes three tertiary hospitals and more than 100 multi-disciplinary clinics that provide a wide range of medical services.
Last week, RMG announced a strategic partnership with My My Trading to acquire a majority interest in American International Hospital (AIH) in Ho Chi Minh City (HCMC) in Vietnam.
AIH’s valuation was arrived at on a “willing-buyer and willing-seller” basis after factoring in the valuation of US$45.6 million of the hospital asset conducted by Savills Vietnam back in July.
As part of this agreement, RMG will also enter into a management service agreement to manage the hospital.
AIH was built in 2018 and is a 120-bed, fully-equipped tertiary hospital with five operating theatres.
The hospital offers a full suite of specialists and essential diagnostics services and is a Joint Commission International (JCI) accredited hospital.
AIH is staffed by about 500 staff including 60 doctors and has seen steady growth in both inpatient and outpatient volumes.
This acquisition enables RMG to enjoy the growing demand for private healthcare services while also complementing its clinic operations in Vietnam.
The expansion is in line with the healthcare group’s strategy to expand its presence outside of Singapore and China and to diversify its revenue streams.
ESR-Logos REIT (SGX: J91U)
ESR-Logos REIT, or ESRLR, is an industrial REIT with a portfolio of logistics, business parks and general industrial properties.
Its portfolio comprises 81 properties across Singapore, Australia, and Japan with total assets of around S$5.5 billion as of 30 June 2023.
The manager of the REIT announced that 7002 Ang Mo Kio Avenue 5 had recently completed its asset enhancement initiative (AEI).
The AEI involves the development of a multi-tenanted, high-specification building with a gross floor area of around 25,000 square metres for advanced manufacturing and data centre tenants.
With the completion of the AEI, the property has secured an occupancy of 50% from two established companies.
One is a provider of specialised logistics solutions for the electronics industry while the other is a listed wellness and healthcare business that manufactures its range of premium beauty and wellness products.
Elsewhere, ESRLR announced the divestment of 2 Tuas South Avenue 2 for S$53 million, representing a healthy 35.2% premium to its valuation of S$39.2 million.
This divestment is subject to JTC Corporation’s approval and should be completed by the fourth quarter of this year.
SIIC Environment Holdings Ltd (SGX: BHK)
SIIC Environment (“SIIC”) is engaged in wastewater treatment, water supply, sludge treatment and solid waste incineration.
The group has an operating history of more than 15 years in China and has an overall portfolio of about 250 water treatment and supply projects in various Chinese provinces.
SIIC has signed an agreement to upgrade and expand its Zaozhuang City Shanting Project.
This project has a total designed capacity of 50,000 tonnes per day.
Of the total, the Zaozhuang City Shanting District WWTP Center Project has a designed capacity of 20,000 tonnes per day and has been in commercial operation.
The agreement will upgrade the discharge standard from Class I Standard A to Quasi Grade IV while extending the concession period.
The remaining 30,000 tonnes per day is taken up by the ZaoZhuang City Shanting district WWTP Reconstruction and Expansion Project with a 30-year concession period.
Both these projects are anticipated to add positively to the group’s future performance.
As a recap, SIIC reported a healthy set of results for the first half of 2023 (1H 2023).
Revenue increased by 9% year on year to RMB 4 billion with gross profit climbing 15.5% year on year to RMB 1.4 billion.
Net profit improved by 8.4% year on year to RMB 593.6 million.
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Disclosure: Royston Yang owns shares of Raffles Medical Group.
