Pitch-perfect strategies
Top three teams in the National University of Singapore-Singapore Exchange Stock Pitch Competition share their winning pitches
The National University of Singapore-Singapore Exchange Stock Pitch Competition 2017 final was held on Monday.
A record number of 310 students, forming 85 teams, took part.
We speak to the top three teams.
WINNER
Who: Nevin Tan, 22, Jonathan Khoh, 22, Yim Yi Xiang, 22, and Louis Quek, 21, accountancy, business management and economics undergraduates from Singapore Management University
How they got started: While most kids were watching cartoons on cable television in primary school, Mr Tan was hooked on news channel CNN.
Specifically, he was intrigued by the ticker indicating the rise and fall of stock prices at the bottom of the screen. This keen interest in the stock market eventually led him to study fund management in polytechnic.
His teammate, Mr Khoh, had came across an autobiography of American economist and professional investor Benjamin Graham when he was 18.
Mr Khoh soon became interested in investing.
The late Mr Graham is widely considered to be the father of value investing. He is still influential, with "followers" such as billionaire philanthropist Warren Buffett.
The team members consider themselves as fundamental analysts - investors who study the underlying health of a company by examining the business' core numbers, said Khoh.
Stock pitch: Singtel (Buy)
Reasoning: Singtel has the first-mover advantage when it comes to the development of 5G technology.
The team believes the 5G network will be a key driver for Singtel in the future based on the company's historical revenue growth of 2.9 per cent when it was the first mover for the switch from 3G to 4G.
There has also been a burgeoning growth among its emerging markets affiliates, such as Indonesian telco Telkomsel.
FIRST RUNNER-UP
Who: Lim Yu Xin, 21, Lim Jiing Wei, 22, Kimberly Tan, 21, Chia Ying Wen, 26, accountancy and business undergraduates from Nanyang Technological University
How they got started: Miss Lim Yu Xin and Miss Lim Jiing Wei, who were on exchange together in South Korea last year, joked that they started investing to earn some spending money.
They constantly monitored the stock market during their exchange, eventually making enough to fund their living expenses there.
"We went shopping after the (stock) markets closed," said Miss Lim Jiing Wei, with a laugh.
She had started investing in her first year of university with about $8,000.
"Investing is a way for us to earn passive income and reduce the burden on our parents," she said.
The students, who consider themselves risk adverse, prefer to invest in big-cap stocks.
The rest of the team also had their fair share of experience with analysing companies.
Miss Tan had joined several case competitions that required her to solve business problems, while Mr Chia studied psychology in polytechnic and was interested in consumer behaviour.
Stock pitch: Sheng Siong (Sell)
Reasoning: The expansion of new stores, a key revenue driver for the company that operates supermarkets in Singapore, has run out of steam.
Plus, the recent acquisition of Redmart by Alibaba-backed Lazada is a threat.
Sheng Siong also faces competition from AmazonFresh planning to expand to Singapore.
SECOND RUNNER-UP
Who: Kelvin Tan, 24, Dennis Woo, 24, Chris Chng, 24, and Chia Yikai, 23, business undergraduates from National University of Singapore
How they got started: The team became interested in investing when they were doing their national service (NS).
Mr Chng said: "During NS, I had many friends who were posting about their investment portfolio. Investing is not a topic exclusive to just business school students."
Mr Woo was even "talent-spotted" to be a finance intern at local investment education firm Big Fat Purse after he sent them a query about an issue with its stock valuation calculator.
The members choose to put their money in a diverse range of investment instruments, from real estate investment trusts and blue chip stocks to the Singapore Savings Bonds.
Stock pitch: Best World (Buy)
Best World is a Singapore-based investment holding company engaged in the distribution of nutritional supplement products, personal care products and healthcare equipment. Its segments include direct selling, export and manufacturing/wholesale.
Reasoning: The company is well-positioned in key direct selling markets such as China and Taiwan.
The direct selling model works particularly well in China, as shown in a Nielsen survey, which indicated that 92 per cent of consumers trust recommendations from family and friends over other forms of advertising.
There are opportunities for the company to capitalise on nationalistic instincts in China, especially with the increasingly protectionist policies worldwide.
About the competition
This annual stock-pitch competition, in its fourth year now, serves as a platform for tertiary students to showcase equity research skill.
Their stock-pitch ideas are critiqued and validated by a panel of professional judges, comprising equity research analysts, finance professionals and academics.
To simulate the hectic schedule and dynamic environment which investment analysts and asset managers commonly face, the participants had five days to submit a research report setting out a "buy/sell/hold" recommendation on a single stock over a one-year investment time horizon.
Based on the report submissions, eight teams were selected and given 48 hours to prepare their final presentation. The judging criteria included quality of the analysis, presentation delivery and responses during the question and answer session.
Ms Lynn Gaspar, senior vice-president for client development and relationship at SGX, said: "This year's finalists had stock recommendations that reflect a bullish outlook for the year ahead.
"During the competition, the students demonstrated breadth of valuation techniques and fundamental financial analysis. And they did a good job of defending their assumptions and understanding of the companies' business during the pitch.
"As the competition continues to rack up record participation, we hope it inspires our students to pursue fast-paced careers in investments or trading and gives them confidence to start investing early."
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