FTSE ST Fledgling Index outperforms Index series with 7% YTD gain
OREANDA-NEWS. The FTSE ST Fledgling Index comprises Mainboard-listed stocks that do not meet size criteria for inclusion in the FTSE ST Small Cap Index. It consists of 212 stocks with a combined market capitalisation of S$27.0 billion.
In the 2018 year-to-date and last 12 months, the FTSE ST Fledgling Index is the best-performing index in the FTSE ST Index series, with price gains of 6.8% and 13.4% respectively.
In comparison, the benchmark Straits Times Index (STI) has generated price gains of 4.4% and 12.9% in the YTD and last 12 months respectively, while the broader FTSE ST All Share Index has posted price gains of 3.5% and 12.0% respectively over the same period.
The 10 largest FTSE ST Fledgling Index constituents by weight account for nearly one-quarter of the Index’s market capitalisation. These 10 constituents have posted an average price gain of 73.4% in the year-to-date, bringing their price gain in the last 12 months to 121.8%. This implies a significant portion of the Index’s performance has been driven by these 10 stocks.
These 10 constituent stocks are classified by the Global Industry Classification Standard (GICS) to the following segments – pharmaceuticals, commodity chemicals, semiconductor equipment, industrial machinery, retail real estate investment trusts (REITs), trading and distribution, property and casualty insurance, reinsurance as well as education services.
The three constituents with the largest weights in the FTSE ST Fledgling Index are Tianjin Zhong Xin Pharmaceutical (7.8%), AEM Holdings (2.9%) and Sunningdale Tech (2.5%).
The three best-performing constituents in the Index in the 2018 year-to-date are Creative Technology (518.7%), AEM Holdings (125.4%) and China Sunsine Chemical (60.0%).
The table below details the 10 largest constituents of the FTSE ST Fledgling Index, sorted by index weight. Click on the stock name to view its profile in StockFacts.
Creative Technology (2.5% weight)
On 9 February 2018, digital entertainment products specialist Creative Technology posted a net loss of US$4.2 million for the three months ended 31 December 2017 – its fiscal second quarter – as revenues fell 6% YoY to US$20.9 million.
Looking ahead, the company said it expects “no significant change” in market conditions, and the overall market for the Group’s products remains challenging. In the current financial quarter, revenue is expected to be lower and it will likely report an operating loss.
The stock surged last month after Creative unveiled its new Super X-Fi 3D audio product, which is touted to deliver a listening experience equal to a high-end multi-speaker system in a theatre – with the same depth, detail, immersiveness and realism. According to local media reports, a number of analysts are optimistic this new technology could help turn the company around.
AEM Holdings (2.9% weight)
On 23 February 2018, AEM Holdings, a global provider of equipment systems solutions and manufacturing services, reported revenue and net profit of S$221.6 million and S$31.5 million respectively for the year ended 31 December 2017, representing YoY increases of 216.0% and 576.2% respectively.
AEM’s topline growth was driven by strong demand for the Group’s new-generation semiconductor handler platform from its key customer, while profits were enhanced by an improved product mix, operating efficiencies, and positive economies of scale.
Looking ahead, the Group expects to perform better in FY2018 versus FY2017, and has guided for at least S$255 million in revenue, and at least S$42 million in operating profit before tax.
China Sunsine Chemical (1.8% weight)
On 28 February 2018, specialty rubber chemicals producer China Sunsine reported a 34% YoY increase in revenue to RMB 2.74 billion, and a 54% YoY jump in net profit to RMB 341.3 million, for the year ended 31 December 2017, driven by strong demand and significantly higher average selling prices.
Although prices are expected to normalise gradually as competitors invest more in environmental protection and safety production measures to maximise their capacity utilisation rates, China Sunsine remains confident of its profitability and outlook over the next 12 months. It expects to retain an edge over competitors based on its ongoing R&D investments and collaborations, as well as high quality and comprehensive range of products.