Speech by Chen Yew Nah

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Speech by Ms Chen Yew Nah Managing Director DP Information Group

Singapore 1000 & SME 500 2008 Media Conference Thursday 17 January 2008

Ladies and Gentlemen,

Thank you for attending this media briefing for the Singapore 1000 and SME 500 rankings and awards for 2008.

With this year’s rankings we commence our third decade of tracking the performance of Singapore’s most successful corporations and most exciting SMEs.

And I am pleased to say that this year’s numbers are among the most positive we have ever recorded with both the Singapore 1000 and SME 500 companies delivering remarkable sets of results.

The ranking period for this latest Singapore 1000 and SME 500 is from 1 June 2006 – 31 May 2007, where GDP performance was generally strong.

OVERALL PERFORMANCE

The Singapore 1000 and SME 500 measures and ranks the performance of Singapore’s corporate sector using several criteria including turnover, profit and credit standing.

We use these criteria to analyse the performance of Singapore’s largest Ranked & Published by companies, its publicly listed companies and its SMEs.

of 6 What makes this year’s results so remarkable is that every major indicator measured by the rankings has shown improvement.

Starting with the Singapore 1000 companies – the largest and most successful businesses in Singapore – we see that their combined sales increased by 11.8% to $1.3 trillion.

It is important to note that it was only last year that the Singapore 1000 companies crashed through the S$1 trillion sales mark.

With the soaring sales has come increased profitability with the Singapore 1000 companies increasing their absolute profits by 15.5% to S$83.5 billion.

Another of the rankings published as part of the Singapore 1000 is a ranking by profits which excludes loss making companies.

Looking at this ranking we see the combined profits of the top 1000 companies has increased by an average of 20.7%. Obviously any year in which profits rise by an average of 20% is a very good year for business.

A similar story of success can be seen in the performance of both the SME 500 companies and the Publically Listed Companies ranking.

The SME 500 ranked by sales increased their turnover by 3.4% and profits by 4.9%. While this may seem modest, it is important to understand that the cut off point for SME500 turnover is $80 million. All companies with turnover exceeding $80 million “graduate” into the Singapore 1000 ranking. Over this ranking period, we have a total of 34 SMEs who have made this leap into the Singapore 1000.

PLCs were the strongest performer of all three categories, with sales increasing by 17.8% from S$214.4 billion to S$252.5 billion.

Ranked & Published by

of 6 The shareholders of the PLC companies would even have more to cheer by their profit performance, up by 32.9% from S$25.9 billion last year to S$34.5 billion this year.

DP CREDIT RATINGS

As any good manager knows, good sales and profit figures are essential but they do not tell the whole story.

Often companies can achieve inflated numbers by taking unnecessary risks or by burdening themselves with heavy debt.

That is why DP Information also examines the credit ratings of all the ranked companies.

This year we have seen a significant leap in the credit standing of these companies.

Singapore’s top 1000 companies have proven themselves to be among the best managed in the world with 62.7% receiving the prestigious Investment Grade Credit Rating of DP 1-4, compared to an already high 51.9% last year.

These credit rating results reflect on the ability of managers to grow their business without taking unnecessary risks.

It shows Singaporean businesses are growing in a sustained and prudent fashion and it is a tribute to the competence of its executives.

The improvement in the credit standing of Singapore companies is particularly relevant in view of the recent sub-prime mortgage crisis. Banks have started to re-evaluate their credit evaluation processes and will be more prudent in their monitoring of credit behaviours in the future. Certain sectors may find themselves under greater periodic scrutiny in Ranked & Published by regards to their credit evaluation.

of 6 Remarkably, the industry with the highest percentage of DP1-4 companies is the property sector, with 81.2% of its 32 ranked companies being judged as Investment Grade.

Property companies have steadily improved their standing in most of the S1000 criteria over the last few years reflecting the current boom in the property sector.

S1000 companies in the Hotels/Food Establishments and Manufacturing sectors have both performed well in their credit ratings. In the Hotel/Food Establishment sector, 78.6% of companies are rated DP1-4 Investment Grade as are 77.0% of Manufacturing companies.

RETURN ON EQUITY

Good managers are also required to get the most out of the resources available to them. As a means of measuring this, this year we have introduced a new ranking based on a company’s return on equity.

So in addition to recognising the companies with the most sales and largest profits, we are now honouring companies based on the efficiency with which they generate returns with the resources available to them.

This inclusion of the ROE ranking makes it easy to compare the profit generated per dollar of capital that shareholders have invested in these companies.

One notable company with an outstanding ROE performance is Wing Tai Clothing Pte Ltd with an ROE of 412%. The company retails apparel and during the ranking period added nine new outlets under the following brands; G2000, U2, Topshop, Topman, Dorothy Perkins, Warehouse, Karen Millen, Nike Women and Nike Sports Culture.

of 6 Publicly listed companies also did very well in the new ROE Ranking. Of the PLCs in the S1000 Net Profit ranking, almost 69.0% of them (178 of 259) are ranked in the S1000 ROE ranking.

Starhub Limited, which reported a 62.7% jump in net profit is the best performing PLC in the S1000 ROE ranking, with an ROE of 74%.

More significantly, among the SMEs ranked by ROE, 422 were also listed in the SME 500 ranking by net profit. 4 out of 5 ranked SMEs with net profit exceeding $10 million were among the top 50 in the SME ranking by ROE.

ACKNOWLEDGEMENTS

The Singapore 1000 and SME500 is the largest annual review of Singapore’s corporate performance. Each year the audited financial results of more than 8000 companies are analysed to determine the rankings and award winners.

Obviously the contribution of our partner organisations are invaluable in making this undertaking a success.

I would like to thank our Key Sponsor HSBC. HSBC has over 130 years of service to the Singapore business community. Their support for the S1000 and SME 500 awards and rankings is an example of the many ways in which HSBC assists local businesses to achieve success.

I would also like to thank the S1000 and SME500 co-producer. For eleven years Ernst and Young Singapore has been our valuable partner and we greatly appreciate their professional advice and expertise.

Let me also thank our supporting organisations: SPRING Singapore, IE Singapore, the Infocomm Development Authority and The Business Times. Ranked & Published by It is a great pleasure to welcome IDA aboard as partner organisation as

of 6 the role they play in developing Singapore’s information technology infrastructure and applications are vitally important to the ongoing success of Singapore’s business community.

I would now like to announce a special award to three companies that have achieved something extraordinary. This year we will be giving three Singapore Honorary Awards to companies that have achieved the same award for 3 consecutive years.

The three Honorary Award Winning companies are:

1. SHELL EASTERN TRADING (PTE) LTD – for winning the Sales/Turnover Excellence – Wholesale Award for the last three years;

2. SINGAPORE TELECOMMUNICATIONS LIMITED – who have won the Net Profit Excellence - Communications/Transport/Storage Award for three consecutive years; and

3. TOSHIBA CAPITAL (ASIA) LTD- a three time winner of the Sales/Turnover Excellence – Finance

I would now like to introduce Mr Lim Tze Yuen, a Partner with Ernst & Young Singapore who will announce the first of our award winners.

Thank you.