OREANDA-NEWS. March 30, 2016. According to Global Industry Classification Standard (GICS®), the Information Technology (IT) sector can be broken down into three industry groups – Semiconductors & Semiconductor Equipment, Software & Services, and Technology Hardware & Equipment. The Electronic Equipment, Instruments & Components segment is part of the Technology Hardware & Equipment industry group.

The Electronic Equipment, Instruments & Components segment is categorised into four sub-industries –

Electronic Equipment & Instruments, Electronic Components, Electronic Manufacturing Services and Technology Distributors. These four sub-industries include manufacturers of electronic equipment, instruments and components, producers of electronic equipment mainly for OEM (Original Equipment Manufacturer) markets, as well as distributors of technology hardware and equipment.

As detailed here, the Singapore government has budgeted S\\$19 billion of funds under the Research Innovation Enterprise 2020 Plan (RIE2020) between 2016 and 2020. About 17% of the budget, which amounts to S\\$3.3 billion, is allocated to Advanced Manufacturing and Engineering (AME), one of the four technology domains. The AME domain aims to develop technological capabilities that support the growth and competitiveness of Singapore's manufacturing and engineering sectors.

Singapore’s Electronics Stocks

Singapore lists 41 Electronic Equipment, Instruments & Components stocks as categorised by GICS, and they have a combined market capitalisation of S\\$5.5 billion. The largest stock – Venture Corporation with a market capitalisation of S\\$2.3 billion – is a constituent of the FTSE ST Mid Cap Index. In the Asia-Pacific region, there are 1,166 Electronic Equipment, Instruments & Components stocks, which have a combined market capitalisation of more than S\\$936 billion.

Singapore’s 10 largest Electronic Equipment, Instruments & Components stocks have a total market capitalisation of S\\$4.4 billion, representing 81% of the segment’s combined market capitalisation. In the month thus far, these 10 stocks averaged a total return of 8.7%, taking their year-to-date and three-year total returns to a 3.8% decline and 44.4% respectively. This compares with a month-to-date median total return of 3.3% for the region’s 1,166 Electronic Equipment, Instruments & Components stocks.

These 10 largest Electronics stocks also maintain an average dividend yield of 4.3%. As of Tuesday’s close, they traded at price-to-earnings (P/E) and price-to-book (P/B) ratios of 13.6 and 1.7 respectively. This compares with a median P/E of 15.3 and a median P/B of 1.2 for the region’s 1,166 stocks.

Note that median measures are used when a large number of stocks are aggregated due to skew effects that can occur with simple averaging.

Among Singapore’s 10 largest Electronic Equipment, Instruments & Component stocks, the five best performers in the month thus far were Elec & Eltek International Company (+37.2%), GSH Corporation (+16.2%), Valuetronics Holdings (+9.8%), IPS Securex Holdings (+7.9%) and Serial System (+5.8%). Together, these five averaged a 15.4% month-to-date return.

The table below details the 10 largest Singapore Electronic Equipment, Instruments & Components stocks, and is sorted by market capitalisation. Click on each stock to visit its profile page on SGX StockFacts.

Name SGX Code Market Cap in S\\$M Total Return MTD % Total Return YTD % Total Return 3 Yr % Dvd Ind Yld % P/E P/B GICS® Sub Industry Name
Venture Corporation V03 2,301 1.8 1.3 16.4 6.0 14.9 1.2 Electronic Manufacturing Services
GSH Corporation BDX 455 16.2 -8.0 -42.8 0.2 6.5 1.2 Technology Distributors
Hi-P International H17 331 1.2 -18.2 -40.0 3.2 N/A 0.6 Electronic Components
GP Industries G20 303 1.6 -3.8 55.6 5.4 10.7 0.8 Electronic Equipment & Instruments
Chuan Hup Holdings C33 256 1.9 -5.2 22.2 3.8 5.8 0.7 Electronic Components
Elec & Eltek International Company E16 252 37.2 22.2 -45.6 3.1 N/A 0.5 Electronic Components
Valuetronics Holdings BN2 171 9.8 8.4 168.9 6.5 7.3 1.2 Electronic Manufacturing Services
Telechoice International T41 123 3.8 5.9 29.8 5.9 11.9 1.7 Technology Distributors
Serial System S69 114 5.8 -6.6 20.2 6.7 7.4 0.7 Technology Distributors
IPS Securex Holdings 42N 100 7.9 -33.9 259.7* 2.4 44.4 8.6 Technology Distributors
Average     8.7 -3.8 44.4 4.3 13.6 1.7  

Source: SGX, Bloomberg & SGX StockFacts (data as of 29 March 2016)

*Note total returns of the stock is based on returns since its IPO date