A couple of micro-cap SGX companies are surging – but investors should think twice before biting

WHILE most Singaporeans are fretting over their ability to save S$1 million for their retirement, one Chinese private investor has made that amount on the Singapore market in the past week alone.

Former brand marketing consultant Cui Wenyan gained a cool S$1 million from having invested S$171,128 for some 4.3 million shares in little-known Singapore-listed company Acma , at S$0.04 apiece in a placement completed on Jan 14.

The issue price of the new shares represented a premium of approximately 29 per cent to Acma’s volume weighted average price of S$0.031 a share on Dec 29 – the day before the placement was proposed.

Since the announcement of the proposed placement, shares of Acma have surged over 800 per cent to close at S$0.275 on Wednesday (Jan 21) – and this was after pulling back from a peak of S$0.36 on Jan 19.

Along with Cui, three other Chinese private investors – Peng Zhen, He Yuanxiang and Lu Shansong, who each put in S$56,000 to subscribe for 1.4 million placement shares in Acma – also netted windfalls.

Peng is the managing director of a technology company in Shenzhen; He is the chief executive officer of a life sciences company specialising in beauty products which manages and runs beauty clinics in China; Le is the founder and director of a technology services company. Each gained S$329,000 on paper in the past week, since the completion of the placement.

Acma’s largest single shareholder, Chew Hua Seng – the founder, controlling shareholder, chairman and CEO of another Singapore-listed company, Raffles Education – made S$1.6 million from this counter alone in that time frame.

Following the placement, he holds a 12.79 per cent stake in Acma, down from 15.34 per cent previously.

But it is befuddling why the bulls in the market have pushed Acma’s share price up.

Existing minority shareholders would not have been happy that their stakes in the company will be diluted: The total of close to 8.5 million new placement shares represented 20 per cent of the company’s 42.4 million shares in issue before the exercise.

The company said it would use the net proceeds from the placement for working capital – hardly an inspiring rationale for the exercise.

Granted, Acma did say in a bourse filing that the placement would “better position the group to address near-term market conditions while pursuing strategic opportunities” – but it has not disclosed any such plans.

For its latest first half-year ended Jun 30, 2025, the investment holding company posted a net loss of S$0.7 million, compared to a net profit of S$0.8 million in H1 the year before.

Total revenue fell 18.9 per cent to S$3.7 million, from S$4.6 million previously, on the back of declines in its tooling and plastic injection moulding, as well as communications, electronics and equipment distribution businesses.

The counter has typically been very thinly traded. In the year to date, Acma’s average daily trading volume has been 336,333 shares, up from 12,749 shares last year.

So this begs the question: Where is this optimism that is driving up the stock coming from?

Another Singapore-listed counter that has surged in trading volume and share price is Sitra Holdings International , which distributes wood-based products and outdoor furniture.

Its shares have doubled in January alone, making it the second-best performer on the Singapore Exchange (SGX) behind Acma.

Its average daily trading volume has climbed to 9.1 million shares in the year to date, from 1.7 million shares in 2025.

Sitra’s outperformance of the wider market is even more puzzling, considering it has not disclosed any corporate actions recently.

For its latest H1 ended June 2025, it reported a net loss of S$0.6 million, narrowing from a net loss of S$0.8 million in the corresponding year-ago period.

H1 revenue grew 13.8 per cent to S$7.7 million on the back of higher sales demand from its European market.

Raffles Education’s Chew is also Sitra’s single largest shareholder, with a 44.09 per cent stake. On paper, his stake in Sitra has netted him a gain of S$7.8 million so far this year.

Not bad for a couple of micro-caps. Acma’s market capitalisation stands at S$14 million after its surge, and Sitra’s is at S$35.6 million.

Incidentally, Chew’s own company is also among the top gainers on SGX. Over the past 12-month period, Raffles Education’s share price has gained 423.5 per cent – making it the fifth best performer on the local bourse.

Shares of Raffles Education jumped over 20 per cent on Monday (Jan 19), after it announced an extraordinary general meeting seeking shareholder approval for the disposal of two assets – a college asset in China for 426.4 million yuan (S$75.9 million), and a Merchant Road property for S$121.8 million.

Last October, the group proposed a special interim dividend of S$0.004 a share for all shareholders, to be funded by expected cash savings arising from a proposal to convert S$15.5 million in outstanding debt due to Chew into new ordinary shares.

Even as retail investors may wish to follow his lead, they should still approach companies with micro capitalisation such as Acma and Sitra with caution.

Without a convincing growth story, the temptation of further stratospheric gains could quickly turn sour.