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Sinostar PEC enjoying better margins; Shen Yao and United Global make up the other winners

The Edge Singapore
The Edge Singapore • 3 min read
Sinostar PEC enjoying better margins; Shen Yao and United Global make up the other winners
Sinostar PEC achieved earnings growth at a CAGR of 32.5% over the three years in consideration.
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China-based oil player Sinostar PEC Holdings emerged as the overall sector winner for this year’s Centurion awards. With an earnings growth at a CAGR of 32.5% over the three years in consideration, the company has been named the winner of this category as well.

In FY2020 ended last December, Sinostar PEC reported that revenue fell 13.1% y-o-y to RMB3.2 billion ($665.2 million) due to lower average selling prices. However, earnings increased 40% y-o-y to RMB158.6 million as it received additional government grants and gains from the sale of consumables. The bottom line was also aided by a drop in finance and administrative costs. In contrast, for FY2016, the company reported earnings of RM68.2 million.

Going forward, the company is betting that the expanded capacity from a new plant will help it capture orders when the economy recovers, which typically drives higher demand for energy and chemical products. With the improved bottom line, the company has resumed paying dividends.

In the most recent 1QFY2021, Sinostar PEC reported 22.5% y-o-y higher revenue of RM960.4 million but earnings surged by 7,307.9% to hit RM59.3 million in the same period due to better margins. “We will continue to focus on operational efficiency, optimise production and explore international export for our products,” says executive chairman and CEO Li Xiang Ping.

Shen Yao Holdings, which has interests in gold mines, has been named the Centurion company for delivering the most shareholders’ returns, with a CAGR of 71% over the three years taken into consideration.

Shen Yao, which used to be called LionGold, came under new controlling shareholders and management in 2019. Yao Liang, the company’s group executive chairman and executive director, took on his role in Nov 2019 and assumed responsibility as the group CEO last May. According to the company, Yao had previously held leadership positions in various financial institutions in Singapore and China, with two decades of experience in corporate finance, real estate and fund management.

See also: Sinostar PEC Holdings appoints former minister John Chen Seow Phun as lead independent director

Shen Yao’s fully-owned subsidiary in Australia Golden Point Group produced 42,697 ounces of gold for the fiscal year ended June 30 last year and generated revenues of some $93.0 million. Besides the gold mining interests, Shen Yao has diversified into fund management and other forms of financial investment.

This year, lubricant trader and manufacturer United Global lost its overall sector winner title to Sinostar PEC. However, it has retained its win for ROE. The Catalist-listed company describes itself as an independent lubricant manufacturer with a wide range of high quality, well-engineered products under its inhouse brand “United Oil”, as well as a host of third-party brands. It is also engaged in the trading of base oils, additives and lubricants.

In addition, via its 60% owned United Oil Company, a joint venture between itself and Madrid-listed oil major Repsol, the United Global manufactures a wide range of lubricants and speciality fluids for the automotive, industrial and marine industries, which are distributed throughout its extensive network covering more than 30 countries. The company operates two blending facilities in Singapore and Indonesia with a combined capacity of 140,000 metric tonnes. With an eye on capturing emerging new market segments, United Global is looking at renewables as well.

Photo: ADIGUN AMPA/Unsplash

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