AUTOMOBILES & AUTO PARTS + TRANSPORTATION, AIR FREIGHT & LOGISTICS

Companies in the automobiles & auto parts + transportation, air freight & logistics sector are generally those that have benefited from a steady lift during the pandemic years. Even as financial markets and hospitality companies suffered, there were significant swathes of industries that stood to gain.

Sri Trang Agro-Industry, a leading rubber player from Thailand, rode on the surge in demand for gloves to become the winner in the returns to shareholders category among its sector peers. In the three years considered for this year’s Billion Dollar Club (BDC), Sri Trang generated a 24.6% CAGR in its share price.

Sri Trang, dual-listed on both the Thai and Singapore exchanges, was established in 1987. Over the years, it has become a fully integrated natural rubber company, taking leading positions along the value chain. Upstream, it has 7,500ha of rubber plantations plus other cash crops. Midstream, Sri Trang commands a 33% market share of natural rubber in Thailand and a share of 11% worldwide. It offers a variety of natural rubber products to meet the diverse needs of customers worldwide, from Technically Specified Rubber (TSR) and Ribbed Smoked Sheets (RSS) to concentrated latex.

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With 35 processing facilities, Sri Trang has a production capacity of 3.18 million tons per annum. The company has extended its hand in downstream end-user products. Sri Trang Gloves Stg (Thailand), one of the key entities that form the entire Sri Trang group, produces 52.5 billion pieces of gloves that are sold to more than 170 countries worldwide, giving it a market share of 7.2% in 2022.

With an operating history of more than a century, Singapore Post S08’s (SingPost) core business has been domestic mail, although it is seeing lower volumes. To make up for this drop, the company has actively expanded into logistics businesses both domestically and in overseas markets. In the three years under consideration for this year’s BDC, SingPost chalked up PAT (profit after tax) CAGR growth of 63.7%, which earned it the top spot in this category among its sector peers. A significant chunk of the growth came from the big jump in earnings between FY2020 and FY2019 when SingPost had to book a hefty impairment on an acquisition.

SingPost recently won the go-ahead from the government to increase its domestic postal rates by 20 cents to 51 cents. However, the company has made it clear that its future growth drivers will be from its expanding regional logistics network, especially from its subsidiaries in Australia, and not so much within the limited Singapore market.

Jardine Cycle & Carriage (Jardine C&C), part of the sprawling Hong Kong-based Jardine conglomerate, came out tops in the weighted ROE (return on equity) category. Jardine C&C differs from other Jardine companies in that its main focus is on Southeast Asia and less so on Hong Kong and China. Its key business is its 50.1% interest in Astra, a diversified group in Indonesia that is also the largest independent automotive group in Southeast Asia. Its other stakes include 26.6% in Vietnam’s Truong Hai Group Corporation, 34.4% in Refrigeration Electrical Engineering Corporation and 10.6% in Vinamilk. Jardine C&C’s stake in Thailand’s 25.5%-owned Siam City Cement also gives it a presence not only in Thailand but also in Vietnam, Sri Lanka, Cambodia and Bangladesh. Here in Singapore, its key business is its Cycle & Carriage car distributorship, selling brands such as Mercedes-Benz, Mitsubishi Motors, Kia and Citroën.

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In this same sector at last year’s BDC, Jardine C&C was the overall winner. This year, although Hutchison Port Holdings Trust Ns8u (HPH Trust), listed on the Singapore Exchange S68 since March 2011, did not top any of the categories, HPH Trust replaced Jardine C&C as the overall winner in this sector with its overall score of 58.8%. HPH Trust owns a portfolio of “market-leading, best-in-class” deep-water container terminals in the Pearl River Delta of South China. In Hong Kong and Shenzhen, HPH Trust runs container terminals such as Hongkong International Terminals, Yantian International Container Terminals and Huizhou International Container Terminals. Of course, both container terminals are key points where China’s massive exports are loaded and shipped to the rest of the world.