It is a well-known fact that share prices are affected by many different variables.
Some of these are related to the fundamentals and financials of the underlying stock while others are sentiment-driven.
One reliable method to enjoy a rising share price is to purchase shares of a company that reports steadily rising revenue and net profits.
Hence, investors rely on business profits as an accurate proxy of how the company’s share price will perform.
If you are a growth investor looking to enjoy capital gains, you should search for companies with increasing profits that should eventually translate into a higher share price.
We profile four such stocks here that you can consider adding to your buy watchlist.
Tiong Woon Corporation Holding Ltd (SGX: BQM)
Tiong Woon is an integrated heavy lift specialist and service provider supporting the oil and gas, petrochemical, infrastructure, and construction sectors.
The group helps to manage turnkey projects that require heavy lifting and haulage requirements.
Tiong Woon reported its fiscal 2023 (FY2023) earnings recently for the year ended 30 June 2023.
Revenue rose 11% year on year to S$135.8 million, mainly contributed by the increase in contributions from the Heavy Lift and Haulage segment.
Gross profit improved by 10% year on year to S$54.2 million while net profit jumped 38% year on year to S$15.7 million.
Tiong Woon also saw its free cash flow surge by 68.1% year on year to S$40 million.
The group doubled its final plus special dividends to S$0.01 in line with the solid performance.
Tiong Woon remains optimistic about its prospects as it sees steady demand for its solutions in the petrochemical and construction sectors and regional markets such as India, Saudi Arabia, and Thailand.
Civmec Ltd (SGX: P9D)
Civmec is an Australian integrated engineering and construction services provider to the energy, resources, infrastructure, and marine sectors.
The group also had an impressive set of earnings for FY2023 with revenue rising 2.7% year on year to A$830.9 million.
Net profit rose 13.7% year on year to A$57.7 million.
Civmec reported a massive surge in operating cash flow from A$1.8 million in FY2022 to A$95.2 million, resulting in a positive free cash flow of A$75.4 million for FY2023.
The group’s order book rose 10.6% year on year to A$1.15 billion and it paid out a final dividend of A$0.03, 50% higher than the A$0.02 paid out a year ago.
Tendering activity remains strong across all the sectors that Civmec is involved in, and the group is keen to secure projects that will allow it to grow its staff strength sustainably.
The engineering specialist is also gunning for further accreditations and will focus on growing its market share in large-scale infrastructure projects.
Grand Banks Yachts (SGX: G50)
Grand Banks Yachts is a manufacturer of luxury recreational motor yachts under the Grand Banks, Palm Beach, and Eastbay brands.
The group has a manufacturing yard in Pasir Gudang in Malaysia with service yards located in the US and Australia.
Grand Banks reported an impressive FY2023 with revenue surging 51.9% year on year to S$114.2 million.
Operating profit catapulted more than five-fold year on year from S$2.7 million to S$14.6 million.
Net profit soared 151.8% year on year to S$10.1 million.
The yacht manufacturer also generated a positive free cash flow of S$8.4 million for FY2023, reversing the negative free cash flow a year ago.
The group doubled its final dividend from S$0.005 to S$0.01.
In July, Grand Banks announced that it would expand its production facility in Malaysia by more than 25% to handle larger luxury boats, increase overall capacity, and accelerate its boat-building business.
This expansion will cost around S$9 million and is projected to complete by August 2024.
F J Benjamin Holdings Ltd (SGX: F10)
F J Benjamin, or FJB, is a leader in brand-building and management through both retail and distribution channels.
The group has offices in four cities, manages over 20 brands, and operates 148 stores.
FJB reported an improved result for FY2023 with revenue rising 7% year on year to S$86.5 million.
Operating profit increased by 10% year on year to S$3.4 million while net profit jumped 19% year on year to S$3.5 million.
During the fiscal year, FJB opened 18 new stores and closed 14 for a net opening of four stores.
Back in April, the group launched a new retail concept at Paragon, Avenue on 3, that features multi-label luxury shoes, fashion accessories, and services such as a café, chocolatier, and suites for beauty treatments.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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