3 Singapore Blue-Chip Stocks with Double-Digit % Gains in 2023: Should You Buy Them?

Time flies and we bid farewell to a 2023 rocked by surging inflation and a sharp increase in interest rates.

Investors are hoping that 2024 sees calm returning to a market rocked by uncertainty.

Despite the tough year, several blue-chip stocks have pulled off impressive gains.

These companies saw their businesses doing well last year and managed to thrive despite the challenges.

Investors could be looking at these stocks continuing their healthy gains in 2024.

We profile three blue-chip stocks that registered double-digit gains last year to determine if they can repeat this feat.

Singapore Technologies Engineering Ltd (SGX: S63)

Singapore Technologies Engineering, or STE, is a technology, defence and engineering group that serves businesses in the smart city, aerospace, defence, and public security segments.

STE chalked up a share price gain of 15.4% for 2023, closing at S$3.89.

The group reported healthy top-line growth for the first nine months of 2023 (9M 2023).

Group revenue rose 12% year on year to S$7.3 billion with broad-based growth across its three divisions.

The Commercial Aerospace division was the standout performer with a 30% year-on-year gain in revenue to S$2.8 billion.

Urban Solutions & Satcom (Satellite Communication) logged a 13% year on year increase in revenue to S$1.4 billion.

Defence & Public Security division reported a 6% year-on-year improvement in revenue if STE’s US Marine division is excluded.

The engineering group secured new contract wins of S$11.7 billion for 9M 2023, with the Defence & Public Security division snagging more than half of this amount.

STE’s order book stood at S$27.5 billion as of 30 September 2023, with S$2.5 billion expected to be recognised in the remaining months of 2023.

The blue-chip technology group has initiated capacity expansion initiatives to grow further.

It acquired Gul Yard, a brownfield site for its ship repair business, and opened the second of four airframe maintenance hangars in Florida, USA.

In mid-December, STE announced the acquisition of D‘Crypt, a cryptographic technology design firm, from StarHub Limited (SGX: CC3) for S$67.5 million to strengthen its cyber capabilities.

Singapore Airlines Limited (SGX: C6L)

Singapore Airlines Limited, or SIA, is Singapore’s flagship airline.

The carrier recorded an impressive 19.5% increase in share price last year to close at S$6.56.

SIA pulled off an impressive financial performance for the first half of fiscal 2024 (1H FY2024) ending 30 September 2023.

Passenger load factor hit a record high of 88.8% with the number of passengers surging 52.3% year on year to 17.4 million.

These strong numbers led to SIA reporting its highest-ever half-yearly operating and net profit.

Revenue for 1H FY2024 rose 8.9% year on year to S$9.2 billion while operating profit hit S$1.6 billion, up nearly 26% year on year.

Net profit soared 55.4% year on year to S$1.4 billion.

In line with the good performance, SIA paid out an interim dividend of S$0.10.

There could be more good news this year.

Global air travel volume is expected to finally exceed pre-pandemic levels this year and make a full recovery.

This news bodes well for the airline industry and could result in higher profits.

SIA also reported its highest passenger numbers for 2023 with November 2023 seeing nearly 3.1 million passengers, up 28.6% year on year.

Sembcorp Industries Ltd (SGX: U96)

Sembcorp Industries Ltd, or SCI, is an energy and urban solutions provider with a balanced energy portfolio of 20.5 GW and a project portfolio spanning 14,000 hectares across Asia.

The group was the top performer among the blue-chip stocks last year with an impressive 54.4% gain in share price to S$5.31.

The utility group, which only reports financial results half-yearly, posted a mixed performance for the first half of 2023 (1H 2023).

Revenue dipped by 6% year on year to S$3.7 billion but core net profit excluding exceptional items rose 8% year on year to S$530 million.

Income investors will also be smiling at SCI raised its interim dividend from S$0.04 to S$0.05.

SCI recently held its annual Investor Day 2023 where it outlined its five-year plan to grow its renewables gross installed capacity from the current 12 GW (installed plus under construction) to 25 GW by 2028.

Management also announced a series of business development efforts to grow the business last month.

On the renewables front, SCI was awarded Singapore’s largest solar power project by JTC as well as a 300 MW solar project in India.

Upon completion, SCI’s gross renewables capacity globally will rise to 13 GW.

The group also partnered with Sojitz and Kyushu Electric to supply Japan with green ammonia produced in India to support the Japanese government’s goal to achieve net zero by 2050.

Over at its Urban Development division, SCI has secured an investment licence for the Vietnam Singapore Industrial Park (VSIP) in Ha Tinh, Vietnam.

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Disclosure: Royston Yang does not own shares in any of the companies mentioned.

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