Singapore’s Jewels: 20 small-cap companies that investors should pay attention to

“Jewels” have a market capitalisation range of up to $1.5b.

Investors looking for Singapore-listed companies to invest in should consider the Lion City’s “20 jewels,” according to RHB.

“Jewels” are small-cap companies which have a market capitalisation range of up to $1.5b.

Topping the list in terms of market cap is supermarket company, Sheng Siong.

RHB predicts that the company’s FY23F-25F Return on Equity (ROE) will come at 27%-30% due to store openings and margin expansion.

“We believe SSG is on track to achieve its target of 2-3 new outlets per year,” RHB said, adding that the company’s higher store count will also lead to better revenue growth for SSG.

In terms of FY22 ROEs, the top “jewel” was media company Audience Analytics (AAL).

“Although AAL operates regionally, key markets Malaysia and Singapore account for close to half of the total revenue in FY22. Markets that have been penetrated for 5 years or more – China, Indonesia, Hong Kong, and Macau – are now close to breakeven point,” RHB said.

“With the reduction in earnings drag, AAL should see slight uplift in earnings going forward through better economies of scale from these newer markets. New markets that have been penetrated in the last five years –  Taiwan, the Philippines, Vietnam, Thailand, South Korea, Cambodia, India, Japan, and the UAE – will also help to improve its current sales mix in the next three to four years and aid in delivering margins leverage,” RHB added.

Alternative investment company Uni-Asia Group and Econ Healthcare, meanwhile, were crowned the top jewel in terms of FY22 dividend yields and FY22 price-to-earnings ratio (P/Es), respectively.

Other small-cap companies which were part of the 20 include Cromwell REIT, Comba Telecom
HRnetGroup, Food Empire, Kimly, China Sunshine Chemical, Q&M Dental, Marco Polo Marine, Hyphens Pharma, RE&S, Trans-China Automotive, Japan Foods Holding, OKP, Singapore Paincare, ISOTeam, and MeGroup.