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Singapore Exchange Ltd (SG:S68)
SGX:S68
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Singapore Exchange
(SGX:S68)
77Outperform
Positive Factors
Market Volatility
SGX is expected to benefit from continued market volatility due to pro-growth policymaking and geopolitical tensions, which should boost trading activity.
Revenue Growth
Currency and commodities trading and clearing revenue was the main contributor, rising by 23%, led by increased currency derivatives volumes and commodity derivatives volumes.
Strategic Investments
SGX has made strategic investments in platforms like Trumid, BidFX, Cobalt, Freightos, and MaxxTrader, which can help in mitigating market cyclicality.
Negative Factors
Business Growth
Slower-than-expected business growth across various asset classes posits downside to analyst estimates.
Dividends
Dividends disappoint despite earnings surge.
Valuation
With a lack of near-term catalysts, SGX is considered fairly valued at current price levels.
Singapore Exchange (S68) vs. S&P 500 (SPY)
Market Cap
$15.53B
Dividend Yield2.43%
Average Volume (3M)2.98M
Price to Earnings (P/E)23.6
Beta (1Y)0.59
Revenue Growth8.76%
EPS Growth15.45%
CountrySG
Employees1,140
SectorFinancial
Sector Strength81
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)0.61
Shares Outstanding1,071,642,500
10 Day Avg. Volume3,058,997
30 Day Avg. Volume2,981,028
Financial Highlights & Ratios
PEG Ratio1.53
Price to Book (P/B)N/A
Price to Sales (P/S)9.27
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.12Price Target Upside-8.65% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Singapore Exchange Business Overview & Revenue Model
Company DescriptionSingapore Exchange (SGX) is a leading multi-asset exchange based in Singapore that provides a comprehensive range of services including equities, fixed income, derivatives, commodities, and foreign exchange markets. SGX operates one of the most internationally diverse and liquid derivatives markets in Asia, serving as a key financial hub for the region. The company offers trading, clearing, settlement, and depository services, catering to both local and international investors, with a focus on delivering innovative solutions and robust market infrastructure.
How the Company Makes MoneySingapore Exchange (SGX) generates revenue through a diverse set of streams primarily centered around its core operations in trading and clearing services. The company earns fees from the trading of equities, derivatives, and fixed income securities, as well as from clearing and settlement services provided for these transactions. Additionally, SGX collects listing fees from companies that choose to list their securities on the exchange. Data, connectivity, and indices services also contribute to its revenue by providing market participants with essential information and technology solutions. SGX's collaboration with global financial institutions and strategic partnerships enhances its product offerings and market reach, further supporting its revenue growth.
Singapore Exchange Financial Statement Overview
Summary
Overall, the financial statements of Singapore Exchange depict a healthy and growing company within the financial industry. The consistent revenue growth, solid profitability margins, and strong balance sheet highlight the company's stability and potential for future growth. While there are some concerns regarding increasing liabilities and financing cash flow fluctuations, the company's overall financial health remains robust.Income Statement
The company has demonstrated solid revenue growth with a steady increase in total revenue from $909.7 million in 2019 to $1.23 billion in 2024. Gross profit margins have remained strong, although there was a slight decrease in 2024. The net profit margin improved over the years, indicating enhanced profitability. EBIT and EBITDA margins are healthy, reflecting strong operational efficiency.85
Very Positive
Balance Sheet
The balance sheet shows a robust financial position with consistent growth in stockholders' equity, increasing from $1.09 billion in 2019 to $1.96 billion in 2024. The debt-to-equity ratio is low, suggesting a conservative leverage approach. The equity ratio has improved, highlighting a strong capital structure. However, total liabilities have grown, which requires monitoring.80
Positive
Cash Flow
Operating cash flow has shown a positive trajectory, indicating strong cash generation capabilities. Free cash flow is positive and growing, although capital expenditures have increased slightly. The free cash flow to net income ratio is favorable, reflecting efficient cash management. However, fluctuations in financing cash flow suggest some variability in financial strategy.78
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.32B | 1.23B | 1.19B | 1.10B | 1.06B | 1.05B | Gross Profit |
| 1.19B | 884.11M | 1.02B | 933.17M | 898.49M | 909.10M | EBIT |
| 694.31M | 606.38M | 655.01M | 544.57M | 537.84M | 567.21M | EBITDA |
| 715.33M | 810.41M | 753.33M | 641.23M | 632.36M | 657.07M | Net Income Common Stockholders |
| 656.31M | 597.91M | 570.89M | 451.40M | 445.41M | 471.81M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 642.49M | 1.13B | 1.07B | 1.09B | 1.10B | 955.51M | Total Assets |
| 1.39B | 3.98B | 3.78B | 3.86B | 3.02B | 2.68B | Total Debt |
| 0.00 | 728.01M | 727.22M | 788.87M | 539.18M | 393.10M | Net Debt |
| -612.49M | -270.10M | -305.96M | -208.88M | -520.85M | -514.28M | Total Liabilities |
| 665.34M | 2.02B | 2.08B | 2.31B | 1.63B | 1.43B | Stockholders Equity |
| 720.93M | 1.96B | 1.70B | 1.54B | 1.38B | 1.24B |
| Cash Flow | Free Cash Flow | ||||
| 668.20M | 551.23M | 417.38M | 562.07M | 524.51M | 603.08M | Operating Cash Flow |
| 745.65M | 615.80M | 470.66M | 606.22M | 569.80M | 637.71M | Investing Cash Flow |
| -78.04M | -173.33M | -5.79M | -555.82M | -209.21M | -329.95M | Financing Cash Flow |
| -478.75M | -459.69M | -428.43M | -106.36M | -207.79M | -69.63M |
Singapore Exchange Technical Analysis
Positive
14.36
Price Trends
13.10
Positive
12.77
Positive
11.76
Positive
Market Momentum
0.29
Negative
71.60
Negative
93.72
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:S68, the sentiment is Positive. The current price of 14.36 is above the 20-day moving average (MA) of 13.15, above the 50-day MA of 13.10, and above the 200-day MA of 11.76, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 71.60 is Negative, neither overbought nor oversold. The STOCH value of 93.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:S68.
Singapore Exchange Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $15.65B | 15.74 | 6.32% | 5.26% | 1.54% | 4.48% | |
77 Outperform | $15.53B | 23.63 | 35.32% | 2.43% | 8.76% | 15.45% | |
76 Outperform | $11.62B | 15.37 | 7.61% | 6.15% | -1.52% | 313.98% | |
71 Outperform | S$4.37B | 20.56 | 4.79% | 5.97% | -5.85% | -11.40% | |
67 Neutral | $3.27B | 32.63 | 2.02% | 6.55% | 4.19% | -42.41% | |
66 Neutral | $5.93B | 21.51 | 2.74% | 6.79% | -0.97% | -40.20% | |
63 Neutral | $12.33B | 9.59 | 8.02% | 79.26% | 12.87% | -4.61% |
* Financial Sector Average
Performance Comparison
SG:S68
Singapore Exchange
14.50
5.48
60.72%
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2.66
0.21
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SG:C38U
CapitaLand Mall
2.14
0.29
15.43%
SG:M44U
Mapletree Logistics
1.13
-0.14
-10.81%
SG:K71U
Keppel REIT
0.85
0.03
3.94%
SG:J69U
Frasers Centrepoint
2.28
0.26
12.93%
Singapore Exchange Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 13.73% | Next Earnings Date: Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted SGX's robust financial performance, with record revenues and significant growth in key segments like cash equities and derivatives. While there were some challenges such as a decline in the interest coverage ratio and flat treasury income, these were outweighed by the positive financial achievements and strategic growth initiatives.Highlights
Record Operating Revenue and Earnings
SGX Group delivered the highest levels of half-year operating revenue and earnings. Group net revenue increased by 15.6% to S$646 million, while adjusted group NPAT increased 27.3% to S$320 million.
Strong Growth in Key Segments
Cash equities net revenue increased by S$35 million or 22%, with SDAV up 31% to S$1.26 billion. Derivatives net revenue grew S$35 million or 14%, with a 20% growth in overall derivative daily average volume.
OTC FX Expansion
OTC FX net revenue grew by S$14 million or 36%, with average daily volume also increasing by 36% to US$136 billion.
Robust Balance Sheet
Moody's reaffirmed SGX's AA2 rating, with a healthy leverage ratio decline to 0.9 times due to improved margins.
Increased Dividend
The Board declared an interim quarterly dividend of $0.09 per share, bringing the total to $0.18 per share, a 6% increase.
Lowlights
Interest Coverage Ratio Decline
Interest coverage ratio decreased to 56 times from 113 times, mainly due to higher interest expense from refinancing.
Flat Treasury Income
Treasury income was comparable year-on-year, hampered by higher collateral balances but offset by declining interest rates.
Non-Cash Adjustments Impact
Non-cash adjustments and one-off items, including a net fair value gain and impairments, affected reported earnings.
Company Guidance
During the first half of fiscal year 2025, SGX Group reported a robust financial performance with a 15.6% increase in group net revenue, reaching S$646 million and a 27.3% rise in adjusted NPAT to S$320 million. The cash equities segment saw net revenue growth of 22%, with the securities daily average value (SDAV) increasing 31% to S$1.26 billion. The derivatives franchise experienced a 14% net revenue growth, with a 20% increase in overall derivative daily average volume. OTC FX also showed strong performance, with net revenue rising by 36% and average daily volume reaching $136 billion. The fixed income, currencies, and commodities (FICC) segment grew by 13%, contributing to 25% of the total revenue. Operating profit margin and NPAT margin improved by 6.1% and 4.5%, respectively. SGX's expenses remained steady, and capital expenditure was reported at $22 million for the first half, with expectations to stay at the lower end of the $70 million to $75 million guidance for the full year. The board declared an interim quarterly dividend of $0.09 per share, marking an almost 6% increase, aligning with its aim for mid-single-digit percentage CAGR growth in dividends subject to earnings growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.