CENTURION CLUB: CYCLICAL CONSUMER PRODUCTS + CYCLICAL CONSUMER SERVICES
Thanks to higher commodity prices and investor interest, steel supplier BRC Asia BEC won the best returns to shareholders category with a CAGR of 14.6% and is the overall sector winner as well. Asian Pay Television Trust S7OU , meanwhile, came out tops for growth in profit after tax (PAT) while coffee shop operator Kimly 1D0 was recognised for the highest weighted return on equity (ROE).
BRC Asia, a regular Centurion Club winner, can trace its roots back to 1938 as Malayan Wire Mesh & Fencing Co. It was listed in 2000 and following the acquisition of Lee Metal Group in 2018, became the largest total reinforcing steel solutions manufacturer worldwide.
Over the years, BRC Asia’s products have been used in notable projects such as the National Library of Singapore, Marina Bay Financial Centre, Marina Bay Sands, Pinnacle @ Duxton and Gardens by the Bay. It has manufacturing facilities across Singapore, Malaysia and China. BRC Asia can hold more than 250,000 metric tonnes of steel at any one time, which gives it a lot more flexibility in the management of its inventory, which is exposed to the vagaries of demand.
BRC Asia chairman Teo Ser Luck notes that due to the disruptions caused by the pandemic, the company’s FY2022 ended Sept 30, 2022, was the first year the company was able to derive “many of the synergies” and economies scale envisaged from acquiring Lee Metal, ranging from procurement to sales, credit control, logistics and production.
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Coupled with record volumes and higher prices, BRC Asia was able to report record revenue of $1.17 billion for FY2022, up 45% y-o-y. Earnings almost doubled to $90.2 million. The company has declared a total FY2022 payout of 18 cents, representing a payout ratio of 54%.
Asian Pay Television Trust (APTT) is the first listed business trust in Asia focusing on pay TV and broadband Internet. While APTT has an investment mandate to take stakes and operate pay TV and broadband businesses in Taiwan, Hong Kong, Japan and Singapore, its sole investment is Taiwan Broadband Communications (TBC) Group.
According to APPT, TBC’s network covers more than 1.3 million households. This high degree of coverage creates a high barrier of entry to potential competitors. From 2012 to 2022, TBC’s franchises experienced a 1.84% CAGR in the number of households, versus Taiwan’s national average of 1.05% in the same period.
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TBC claims to have a resilient business model with an efficient cost structure and a subscription-based business model where most payments are made in advance. By cross-selling and bundling broadband and premium digital TV services, it hopes to achieve higher average revenue from each subscriber.
Kimly, a leading operator of coffee shops in Singapore, is the winner in the ROE category, generating 26.3% in the three years under consideration. Besides owning and operating coffee shops directly, the group also leases some of them out to other operators.
As at 1HFY2023 ended June, Kimly managed a total of 84 food outlets, 170 food stalls, 10 Tonkichi and Tenderfresh restaurants, and four Tenderfresh kiosks across Singapore. The company was listed on the Singapore Exchange S68 in 2017. Since then, it has expanded both organically and via acquisitions too, as in the case of third-party halal F&B businesses and brands.
