Special Report

Beacon of hope, A Lighthouse in the current economic turmoil

The Fastest Growing 50 (FG50) certification is a key corporate accolade on the yearly corporate calendar for the last 7 years. An annual initiative by the DP Information Group, the FG50 Ranking recognizes the top 50 companies based on their Compounded Annual Growth Rate (CAGR) in turnover over a 3-year financial period. To qualify, a company must achieve a minimum of 10% turnover growth every year for the last three years while remaining profitable each year.

Over the years, the FG50 Ranking has served as an effective yardstick for aspiring companies to benchmark themselves in terms of the growth of their businesses. More than any other years, this FG50 list is likely be the most closely followed, as amidst the current economic uncertainty, more are looking to the winner’s list not only to pick up good companies but also identify the emerging sectors that is expected to feature prominently in Singapore’s economic growth scene in the next few years.

While the Wholesale, Transport/Storage and Finance sectors continue to contribute the most number of FG50 winners (60%), this year also saw a total of 4 companies from the Services and Information & Communication joining the ranks of FG50 winners as compared to one in the previous year.

SIM Pte Ltd is an example of a company from the Service sector that has made its way to the FG50 list. Chalking an impressive CAGR of 820.8%, the education company which is the professional development and global education arm of the Singapore Institute of Management University, is a glowing testimony of the success of the government’s aim to transform Singapore into an education hub.

One common feature observed of FG50 winners, both current and previous is their engagement with markets overseas. About 80% of all FG50 winners in the last 5 years derive part of their turnover from customers outside Singapore.

Today, besides traditional sectors like Wholesale, Manufacturing and Transport/Storage, a higher number of companies from the Services and Information & Communication which traditionally serves only the domestic market have also expanded their clientele base beyond Singapore, signaling the beginning of a new wave of “export” –an export of expertise and knowledge.

This year’s FG50 list also provides a good mix of not only established and emerging sectors, but also younger and older companies. The presence of companies that have been in operation for more than 20 years (slightly more than a quarter) amongst this year’s winners underlines the importance of continual realignment of growth strategies in order to stay relevant to market changes. One such example is Universal Integrated Corporation Consumer Products Pte Ltd, where continual innovation and staying in tune with changing customer needs have helped ensure that the once familiar UIC tune is kept alive.

Another trademark of FG50 companies is the credit quality of the winning companies. 46% of this year’s winners have attained an Investment Grade quality in DP Credit Rating and another 52% are in the High Yield category. Their ability to not only sustain remarkable growth over the last 3 financial year periods but to grow in such a manner without incurring undue risk to their stakeholders, and yet remain profitable, is an endearing quality especially under today’s financial climate.

DP Credit Rating200920082007
Investment Grade (DP1 - DP4)46%42%52%
High Yield (DP5 - DP6)52%54%44%
High Risk (DP7 - DP8)2%4%4%
Distribution of DP Credit Rating of FG50 winners

The FG50 winners have demonstrated that it is possible to continue to grow in such challenging times. The success of each of these winners is Quod Erat Demonstrandum for other companies to follow and emulate. And the FG50 has not only proven its ability to identify strong performing companies but also the green shoots that would bring the Singapore economy into the next phase of growth.

Article contributed by DP Information Group, Certification Body of the annual Fastest Growing 50.