Stock prices usually do well for one main reason — the businesses behind their tickers are flourishing.
In essence, the business is likely to be experiencing an increase in profit and cash flow, allowing it to pay out more dividends.
Investors who seek income recognise that the company has become more valuable, thereby bidding up its share price.
When hunting for great investment ideas, it makes sense to look at what a company is doing right and to assess if this momentum can carry on.
There have been a handful of companies that did well this year.
Some are latching on to sustainable trends while others have enduring catalysts that can enable them to grow steadily over the years.
Here are four Singapore stocks that have the potential to deliver impressive returns in 2022 and beyond.
iFAST Corporation Limited (SGX: AIY)
iFAST Corporation Limited is a financial technology company that hosts a platform for the buying and selling of investment products such as unit trusts, equities and bonds.
The group has turned in an admirable performance for the first nine months of this year (9M2021), buoyed by fund inflows as more people went online to communicate and telecommute.
Net revenue climbed by 38.1% year on year to S$61.5 million while operating profit jumped by 59.2% year on year to S$27.8 million.
Net profit surged by 63.6% year on year to S$23.4 million.
iFAST’s assets under administration (AUA) grew 46.1% year on year to hit a record high of S$18.38 billion as of 30 September 2021.
In line with the strong results, the fintech group declared an interim dividend of S$0.013, 62.5% higher than the S$0.008 it paid out a year ago.
There could be more good news coming up for iFAST as it recently unveiled its five-year growth plan.
Meanwhile, the group has also clinched a massive project for the Hong Kong electronic Mandatory Provident Fund (eMPF) and also intends to pursue more licences in other jurisdictions to further grow its business.
The Hour Glass (SGX: AGS)
The Hour Glass, or THG, is a luxury watch retailer with 50 boutiques spread out across 12 cities in the Asia-Pacific region.
The group has seen a strong uptick in luxury watch purchases, as evidenced by its recent fiscal 2022 first half (1H2022) earnings.
Revenue surged by 62% year on year to S$447.4 million and net profit more than doubled year on year from S$29.7 million to S$62.6 million.
Free cash flow also jumped sharply from S$51.1 million to S$78.6 million.
The group declared an interim dividend of S$0.02, unchanged from a year ago.
Judging from the sanguine outlook and better numbers, THG should be able to pay out more dividends over time.
Its track record and reputation of being one of the premier Swiss luxury watch multi-brand retailers should also stand it in good stead to continue its stellar performance.
Q&M Dental Group (SGX: QC7)
Q&M Dental owns the largest private network of dental clinics in Singapore with 90 outlets across the island.
The group also operates 38 dental clinics and a dental supplies and equipment distribution company in Malaysia and is a substantial shareholder in Aoxin Q&M Dental Group (SGX: 1D4).
The dental chain reported an impressive performance for 9M2021.
Revenue rose 62% year on year to S$152.3 million, driven by a more than four-fold increase in revenue for its dental equipment and medical laboratory division.
Net profit surged by 154% year on year to S$35.4 million.
In line with the good results, Q&M Dental declared a third interim dividend of S$0.01, bringing total dividends for 9M2021 to S$0.03.
The group has ambitious plans to extend its presence to achieve further growth.
It intends to open at least 30 dental clinics per year from 2022 onwards in both Singapore and Malaysia over the next decade.
Q&M Dental is also looking to open new dental clinics in Southeast Asia and will focus on devising new tests for its clinical testing laboratory.
AEM Holdings Ltd (SGX: AWX)
AEM provides comprehensive semiconductor and electronics test solutions to clients in Asia, Europe and the US.
The group has manufacturing plants located in Singapore, Finland, China, and Malaysia.
AEM reported a lacklustre set of earnings for 9M2021 due to a key customer transitioning over to its next-generation test platforms during the first half of this year.
Revenue fell by 22.3% year on year while net profit declined by 33.4% year on year to S$53 million.
However, there are several catalysts in place for the group.
AEM has enjoyed increased orders in the second half of 2021 that should translate to better business prospects next year.
It is also expecting strong adoption of its new platforms in 2022 and has made significant progress in securing business with 10 of the top 20 semiconductor companies.
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Disclaimer: Royston Yang owns shares of iFAST Corporation Limited.