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Singapore's hardware and software companies
  • Almost one in 10 SGX-listed companies is involved in the technology industry. There are 24 companies listed for trading that derive the majority of their revenues from hardware and software operations.
  • Hardware companies account for 17 SGX-listed counters. Their price performances range so far this year from a 32.4% increase for Unified Communications to a 47.4% decline for Anwell Tech. Hardware companies on average declined 6.3%.
  • Seven companies generated the majority of their latest revenues from software-related operations. Their price performances were more varied than those of hardware companies, ranging from Silverlake Axis' 42.0% gain to Sinotel Technology's 12.5% decline.

Technology, by definition, is the application of scientific discovery for practical purposes and is an integral part of our daily lives. In an economic context, technology usually always refers to machinery and the ways it is able to optimise commercial and industrial processes; this is particularly true of information technology.  Almost one in 10 companies listed on Singapore Exchange (SGX) is involved in the supply chain of the technology industry. Such businesses include equipment manufacturing and software publishing.

Companies can derive their revenues from various avenues. Bloomberg lists five distinct revenue streams: design manufacturing & distribution, hardware, semiconductors, software and, technology services. Examples of hardware are computers, audio equipment and electronics components. This Market Update examines the stocks that generate revenue in the hardware and software segments. 

Hardware

Hardware companies manufacture computer hardware and paraphernalia, printing and imaging machines, consumer electronics, electronics components, telecommunications equipment, computer storage devices and other hardware such as automated teller machines, biometric and surveillance systems.

The 17 SGX-listed counters that derive more than 50% of revenues from hardware operations are listed below. Eight of these companies belong to the Technology sector, as defined by the Industrial Classification Benchmark (ICB), while seven are considered Industrials stocks. The remaining two counters are Consumer Goods providers. Price performances for the year-to-date period range from a 32.4% increase for Unified Communications to a 47.4%  for Anwell Technologies, respectively. On average, these stocks declined 6.3% in price, close to the median 7.1% decline.

 

Short Name

Ticker Code

ICB Sector Name

Mkt Cap (S$m)

Px Chg YTD (%)

Dvd Ind Yld (%)

Hardware Revenue (%)

TPV TECHNOLOGY

T18

Technology Hardware & Equipment

610

-17.5

4.7

100.0

EUNETWORKS GROUP*

5VT

Technology Hardware & Equipment

291

-14.0

0.0

79.1

GP INDUSTRIES

G20

Electronic & Electrical Equipment

258

28.8

5.8

74.9

CREATIVE TECH LT

C76

Technology Hardware & Equipment

164

-28.3

2.3

79.8

BROADWAY INDUS

B69

Industrial Engineering

94

-27.4

0.0

64.9

MFS TECHNOLOGY

5BM

Electronic & Electrical Equipment

89

0.0

0.0

100.0

8TELECOM INTL

E25

Technology Hardware & Equipment

59

-18.0

0.9

68.5

ACTION ASIA LTD

A59

Leisure Goods

56

-6.7

5.0

100.0

MEMTECH INTL LTD

M26

Electronic & Electrical Equipment

50

0.0

4.3

70.6

AZTECH GROUP LTD

560

Technology Hardware & Equipment

46

-7.1

0.0

86.1

PLASTOFORM HLDG

P82

Leisure Goods

39

-31.0

0.0

100.0

CEI CONTRACT MFG

C11

Electronic & Electrical Equipment

33

-9.7

4.4

100.0

ANWELL TECH LTD

G5X

Electronic & Electrical Equipment

28

-47.4

0.0

59.1

POWERMATIC DATA

P12

Technology Hardware & Equipment

25

13.6

7.0

63.8

TSH CORP*

574

Aerospace & Defense

22

-4.3

0.0

54.8

UNIFIED COMMUNIC

U18

Technology Hardware & Equipment

16

32.4

4.1

67.1

JASON MARINE GRP*

5PF

Technology Hardware & Equipment

14

28.7

1.5

74.2

Source: Bloomberg (data as of 1 October 2013), * denotes Catalist stocks

 

Software

Software companies develop application and infrastructure software for a variety of purposes and industries. Seven companies reported more than 50% of their latest revenues from software-related operations. Of these, six belong to the Technology sector, while a company from the Industrials sector rounds off this list. The full list is provided below. Price performances for software companies were more varied, ranging from Silverlake Axis’ 42.0% gain to Sinotel Technology’s 12.5% decline. Software stocks on average rose 10.2% with a 2.3% median gain.

 

Short Name

Ticker Code

ICB Sector Name Market Cap (S$m) Px Chg YTD (%) Dvd Ind Yld (%) Software Revenue (%)
SILVERLAKE AXIS

5CP

Software & Computer Services

1594

42.0

4.4

73.6

DMX TECHNOLOGIES

5CH

Software & Computer Services

261

2.3

1.3

54

TREK 2000 INTL

5AB

Electronic & Electrical Equipment

65

-8.3

1.1

100

SINOTEL TECHNOLO

D3W

Technology Hardware & Equipment

38

-12.5

0

100

STRATECH SYSTEMS^

S73

Software & Computer Services

30

-5.0

0

100

INTL PRESS SOFTC*

571

Software & Computer Services

19

41.9

0

74.3

ONIONTECH LTD*

5HG

Software & Computer Services

7

10.8

0

100

Source: Bloomberg (data as of 1 October 2013), * denotes Catalist stocks, ^ on Watch-List

 

The two biggest software companies are Silverlake Axis and DMX Technologies Group. With a market capitalisation of $1.6 billion, Silverlake Axis is the biggest company in the software segment. It makes up 80% of the aggregate market capitalisation of the software companies listed above and 41% of the weight of the 24 SGX-listed companies in both the hardware and software businesses.

Silverlake Axis provides technology services for financial institutions in Asia and the Middle East and is the best performing software company so far this year, rising 42.0%. DMX Technologies is a Hong Kong-based digital media company. It has climbed 2.3% so far this year making it the fourth best performing software stock.

The other three of the top five best performing software stocks in the year-to-date period are as follows:

  • International Press Softcom was established in 1968 and listed on Catalist in 1999. The group provides supply chain solutions in print and media products for companies and publishers worldwide. Its price has gained 41.9%.
  • Oniontech is a Korean-based provider of mobile software and content-related services. The group’s share price rose 10.8%.
  • Stratech Systems develops information technology and advanced technology systems for global clients in various industries. Projects that the company has worked on include an vehicle access control system and an online open bidding system for the Land Transport Authority in Singapore. Its share price has declined 5.0%.

 


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Geoff Howie
Geoff Howie

Mr Howie is a Market Strategist at SGX, providing investment application and market updates to the market participants of the SGX. He is a key contributor to the educational materials on SGX My Gateway. He previously held lead broking and strategist roles in four Asia Pacific offices of MF Global, Macquarie Securities in Hong Kong and was also Treasury Adviser to the Coalition Leaders in the Queensland Parliament. He holds a Bachelors and Masters degree in Economics, the latter extending into deferred PhD work after receiving the highest grading for first-mover research and modelling conducted on the Shanghai economy. Mr Howie’s other notable achievements include receiving two HKSI Outstanding Achievers/Candidate of the Year awards in 2005 and a commendation in the Queensland Parliament Hansard for his analysis on government finances when he was Treasury Adviser to the Coalition leaders.