With the earnings season mostly over, it’s time to take stock of the raft of companies that announced their latest results.
Investors will be curious to know which companies can grow their revenue and earnings amid the uncertain macroeconomic environment.
As the saying goes – when the business does well, the share price eventually follows.
We sifted out four companies that reported better revenue and profits and investors may wish to add these to their buy watchlists.
YHI International (SGX: BPF)
YHI is a global distributor of high-quality automotive and industrial products and has a presence in more than 100 countries.
The group distributes a diverse range of automotive products such as tyres, alloy wheels, energy solutions, and other products to more than 5,000 customers globally.
For the first half of 2024 (1H 2024), YHI’s sales rose 6.5% year on year to S$198.6 million.
Gross profit improved by 16.7% year on year to S$52.5 million but higher administrative and distribution expenses caused net profit to inch up just 3.2% year on year to S$7.7 million.
The business generated a positive free cash flow of S$7.6 million, though this was 63% lower than the S$20.9 million churned out in 1H 2023.
Management warned that the Israel-Hamas conflict has disrupted supply chains, causing escalating ocean freight costs.
Global economic uncertainties, coupled with increasing trade tensions from China, will result in a subdued and challenging second half of 2024 (2H 2024).
A mitigating factor is the group’s distribution business which should stay resilient and contribute positively to 2H 2024’s results.
YHI intends to strengthen its distribution networks with a focus on growing its energy solutions business across different markets.
Sim Leisure Group (SGX: URR)
Sim Leisure Group, or SLG, is a designer, developer, and operator of theme parks.
The group owns the ESCAPE brand of attractions that includes ESCAPE parks and challenges and operates the Kidzania attractions in both Singapore and Malaysia.
1H 2024 saw SLG report a sparkling set of earnings as revenue jumped 56.2% year on year to RM 86.8 million.
Gross profit more than doubled year on year from RM 19.8 million to RM 40.3 million as the cost of sales grew less than revenue.
After accounting for higher finance costs, net profit climbed 23.2% year on year to RM 10.9 million.
Even with capital expenditures more than quadrupling year on year to RM 8.6 million, the business still eked out a positive free cash flow of RM 2.9 million for 1H 2024.
During 1H 2024, SLG launched two new parks – an adventure ESCAPE park on 120-acre land in Tanjung Tualang, Malaysia, in April 2024, and Kidzania at Sentosa Singapore in May 2024.
These two new parks should boost the group’s top line and management is confident of positive profit contributions in line with a short gestation period.
Grand Venture Technology (SGX: JLB)
Grand Venture Technology, or GVT, is a solutions and services provider for the manufacture of complex precision machining, sheet metal components, and mechatronics modules.
The group reported an encouraging set of earnings for 1H 2024 with revenue rising 26.8% year on year to S$68.3 million.
Gross profit improved by 33.2% year on year to S$18 million while net profit increased by 26.6% year on year to S$4.3 million.
GVT’s three divisions all recorded year-on-year revenue increases, with its largest segment, Semiconductor, seeing progressive improvement from key customers with healthy signs of recovery.
Management believes that structural drivers such as artificial intelligence (AI) and the shift towards 2.5D and 3D dynamic random access memory (DRAM) technology will increase chip complexity and drive more equipment demand in the future.
GVT has guided 2024’s revenue to be between S$148 million to S$154 million, representing a 33.2% to 38.6% year-on-year growth.
Straco Corporation Limited (SGX: S85)
Straco Corporation is an owner and operator of tourist attractions in both Singapore and China.
The group owns and operates the Shanghai Ocean Aquarium, Underwater World Xiamen, the Lixing cable car service in China and the Singapore Flyer attraction in Singapore.
For 1H 2024, Straco reported an 11.9% year-on-year increase in revenue to S$35.9 million, boosted by a 13% year-on-year increase in visitor arrivals in line with the recovery of the tourism industry.
Operating profit climbed 41.1% year on year to S$15.5 million while net profit surged 64.5% year on year to S$10.5 million.
The group maintains a strong balance sheet flush with S$164.8 million of cash with just S$6.5 million of debt as of 30 June 2024.
Free cash flow inched up slightly from S$11.7 million in 1H 2023 to S$11.8 million for 1H 2024.
Management remains cautiously optimistic that domestic tourism will continue to drive its China numbers.
Over in Singapore, the government will inject S$300 million into the nation’s Tourism Development Fund to help develop and market new tourism products and experiences.
This move should be a long-term positive for the tourism sector and should attract higher numbers of visitors in the years to come.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
