Regular winner at the Billion Dollar Club ST Engineering just can’t get a break. The engineering conglomerate has come out tops for the weighted ROE category, with a weighted ROE of 23.75 times over the three years measurement taken into consideration.
The company is also the overall sector winner among its peers in the industry classification of Automobiles & Auto Parts; Industrial Conglomerates; Industrial Goods; Minerals; Utilities.
Under CEO Vincent Chong, ST Engineering late last year announced a restructuring plan to better capture new growth opportunities ahead. For years, the company was organised in the land, sea, air and electronics sector-based structure that has defined the company for decades. Since early this year, ST Engineering has been reorganised into two big clusters: Commercial, defence and public security.
See also: ST Engineering's current share price weakness an opportunity to accumulate: RHB
The company says the new organisation structure is designed to enable better execution of its global growth strategy of strengthening its core businesses, and pursuing growth in smart city and international defence businesses.
“In the last three years, we were focused on delivering results by executing our strategy of strengthening our core businesses, and pursuing growth in smart city and international defence businesses,” says Chong.
“The environment today is one where technological advancements and shifting customer demands are catalysing disruptive business models and rapidly transforming the competitive landscape. The time is now right for us to create a sharper and more agile organisation that will be highly attuned and responsive to our customers’ needs in the new world,” he adds.
Under the new structure, the commercial cluster takes care of potentially fast-growing business in commercial aerospace, urban solutions and satellite communications. The other cluster, defence and public security, will focus on customers from those sectors both local and overseas.
Sri Trang Agro-Industry, meanwhile, came out tops for returns to shareholders. Over the three years, its share price grew at a CAGR of 69%. The company, which is one of the larger integrated rubber companies around, is listed on both the Stock Exchange of Thailand and the Singapore Exchange.
Over the past couple of years, Sri Trang has benefited from the pandemic which sparked demand for medical gloves. It owns around 7,200 hectares of rubber plantations, 34 processing facilities and glove-making facilities with an annual output of 33 billion pieces a year. Its glove-making subsidiary, Sri Trang Gloves, was listed on the Singapore Exchange earlier this year.
Straits Trading, one of the oldest and most famous Singaporean companies, has been named the company for returning the most earnings growth for this sector, with a CAGR growth of 3.5%. The company can trace its roots back to 1887 in tin mining but over the years, it has diversified into property, hospitality and investments.
Tin miner Malaysia Smelting Corporation, a separately listed company controlled by Straits Trading, recently reported it is profitable thanks to rising prices of the commodity. Straits Trading, separately, is enjoying the fruits of its other investments too, specifically, its 18.97% stake in ARA Asset Management, which is to be acquired by ESR Cayman for US$5.4 billion ($7.2 billion).
Straits Trading will receive US$845.3 million in a combination of cash, ESR shares and so on when the deal is done. Straits Trading paid $294.4 million back in 2013 for its stake.
Cover photo: Albert Chua/The Edge Singapore
