To The Moon

💰Rollercoaster market ahead, all eyes on economic data and earnings releases.

💹With high ROE, $STI.SI(STI.SI)$ 's industrials stocks hold the value you are looking for.

📣Stay tuned and supercharge purchasing power with CashBoost!

| Market recap

On January 14, the $.SPX(.SPX)$ rebounded slightly, closing up by 0.11%, while the $.IXIC(.IXIC)$ dropped by 0.23%, with all 7 major tech stocks seeing declines. $NASDAQ Golden Dragon China Index(HXC)$ rose 2.1%, with $XPeng Inc.(XPEV)$ surging over 6% and $Kingsoft Cloud Holdings Ltd(KC)$ rising nearly 4%.

Headlines:

Have you downloaded Xiaohongshu? Seeking alternatives to TikTok, a huge influx of American users (#TikTok refugees) is flooding into Xiaohongshu and Lemon8, two popular Chinese social media platforms. Alas, that cost $Meta Platforms, Inc.(META)$ and $Snap Inc(SNAP)$ a lot: They saw their stock prices drop by 2.3% and 6.7%, respectively. The prior consensus was that these two would be beneficiaries of a potential TikTok ban.

Rollercoaster ahead, hold on tight.

Wall Street is concerned that positive economic data may reduce the likelihood of interest rate cuts this year, or even lead to a policy shift. Additionally, the fiscal policies following Trump’s presidency could stimulate economic growth, prompting the Fed to take action to cool down the economy. The debate now revolves around whether the market has fully priced in expectations of future policy changes. With growing focus on the Fed’s potential interest rate cuts fading, the earnings season, starting from this week, will have an even greater impact on the market.

Tops of the list:

- Airline stocks continued their upward trend, with $American Airlines(AAL)$ rising 3.5%, $United Continental(UAL)$ up 3%, and $Delta Air Lines(DAL)$ gaining 2%.

- Quantum computing stocks rebounded, with $D-Wave Quantum Inc.(QBTS)$ rising 23.5%, $Rigetti Computing(RGTI)$ up 47.93%, and $Quantum Computing Inc.(QUBT)$ climbing 13.96%.

- Virtual asset-based stocks surged across the board, while Bitcoin at one point breaking $97,000. $MicroStrategy(MSTR)$ gained 4.19%, $Riot Platforms(RIOT)$ rose 3.99%, and $Bitdeer Technologies Group(BTDR)$ jumped 11.28%.

- China A-share market, Xiaohongshu-concept stocks saw speculative activity, with companies like $Foshan Yowant Technology Co.,Ltd.(002291)$ and $Shanghai Yaoji Technology Co.,Ltd.(002605)$ experiencing dramatic surges (smell like memes, tho). $Cambricon Technologies Corporation Limited(688256)$, after opening down over 4%, quickly turned positive and closed up 0.3%.

| ROE: What is it, indeed?

As Warren Buffett put it, “Focus on return on equity, not earnings per share.”

What is ROE? ROE, or Return on Equity, is an important indicator of how effectively a company utilizes its equity capital to generate profits. In simple terms, ROE measures a company’s ability to create profit using shareholder funds: how much profit the company generates for every dollar invested by shareholders. Buffett believes that a great company efficiently uses shareholder capital to generate profits, and ROE is the ideal metric to measure this.

In Singapore, industrial service companies play a vital role in supporting the country’s advanced manufacturing, construction, and technology sectors. The demand for these services is driven by various factors, including rapid urbanization, ongoing technological advancements, and the growing emphasis on sustainable practices.

In addition to major Singaporean industrial players such as $Keppel(BN4.SI)$, $SamuderaShipping(S56.SI)$, and $Boustead(F9D.SI)$, other key industrial service providers are also worth paying attention to. Compared to industry giants, these companies tend to have higher ROEs due to their smaller capital size, making them more capable of delivering greater value to shareholders.

| Dividend Play For You

Industrial stocks are more stable and represent low-volatility investment options. For investors seeking steady returns with a relatively low risk tolerance, industrial stocks are a solid choice.

Industrial companies typically possess large asset bases and solid financial foundations, enabling them to maintain relatively stable profitability even during economic downturns.

From a long-term investment perspective, the low volatility of industrial stocks makes them a key component in an investor’s portfolio allocation.

SGX Dividend Play (as of Jan. 15th, 2025)

Civmec (P9D), PanUnited (P52), and UnionSteel (ZB9) are stocks worth paying attention to, as they all have a price-to-earnings (PE) ratio below 10x and offer attractive dividend yields.

✅ $Civmec(P9D.SI)$: ROE ~14%, Price ~S$100/lot

Headquartered in Henderson, Australia, Civmec provides engineering services to the oil and gas industry, including civil engineering, prestressed concrete, mechanical and piping, steel structure fabrication, equipment leasing, and structural maintenance.

Civmec's Singapore branch operates across four sub-sectors: infrastructure, energy, resources, and marine & defense, with the resources sector generating the highest revenue. The majority of its revenue comes from Australia.

✅ $PanUnited(P52.SI)$: ROE ~17%, Price ~S$60/lot

Established in 1974 and headquartered in Singapore, PanUnited is a diversified conglomerate.

PanUnited is the largest supplier of ready-mixed concrete in Singapore and a key supplier to the major construction firm, Lian Beng. It operates a fleet of over 300 concrete mixers in the Singapore market. In logistics, PanUnited is one of the region's leading suppliers, known for its extensive network and efficient services.

✅ $UnionSteel(ZB9.SI)$: ROE ~15%, Price ~S$50/lot

UnionSteel is a multi-business investment holding company, with three primary business segments: metals, scaffolding, and engineering. The group began operations in 1984 under the name YLS Steel Pte Ltd, focusing on trading ferrous scrap metal. Since 1991, it has distributed construction steel through Union Steel Pte Ltd.

UnionSteel is a key player in Singapore's metal recycling industry, with advanced processing facilities and technology for efficiently handling large volumes of scrap metal.

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