3 Blue-Chip Companies That Have Soared Over 50% From Their Lows

When the COVID-19 pandemic hit our shores with a loud thud back in March, it resulted in a swift market crash.

Few companies, if any, were spared.

Many companies were sold down viciously as investors threw the baby out with the bathwater.

The indiscriminate selling even affected blue-chip companies as investors anticipated a sharp fall in demand for products and services.

Many industries, from airlines to hotels, were badly hit by widespread lockdowns and border closures.

However, there were also some pockets of resilience among the many businesses listed on the Singapore stock exchange.

After the initial panic selling subsided, investors began to behave more rationally.

Many began buying up the stocks of companies that proved resilient and able to continue growing despite the challenges brought about by the crisis.

As a result, some companies have recovered strongly from the share price lows reached during the height of the pandemic back in March.

Here are three blue-chip companies that have soared more than 50% above those lows.

Venture Corporation Ltd (SGX: V03)

Venture is a global provider of technology products, services and solutions.

The group is headquartered in Singapore and employs more than 12,000 people worldwide.

Venture has the know-how and intellectual expertise in domains such as life sciences, medical devices and fintech, allowing it to serve a broad range of customers.

From its low of S$12.52 reached during March, the share price has jumped by 61% to the current S$20.15.

For the first half of 2020, revenue declined by 26% year on year to S$1.4 billion as Venture was impacted by factory closures in various countries.

Profit fell by 28% year on year as a result.

However, the group declare a higher interim dividend of S$0.25 compared to S$0.20 a year ago.

However, if we look at just the second-quarter financial performance, it showed that revenue inched up by 2.9% year on year.

Net profit was up 16.3% year on year to S$24.2 million as a rebound in May and June led to better results.

Management sounded an upbeat tone and expects the recovery seen in the second quarter to extend into the second half of 2020.

Mapletree Industrial Trust (SGX: ME8U)

Mapletree Industrial Trust, or MIT, invests in a portfolio of industrial real estate assets and data centres located in Singapore and overseas.

As of 30 June 2020, MIT’s total assets under management was S$5.9 billion, comprising 87 properties in Singapore and 27 properties in North America.

The REIT reported stable operating metrics and withheld a portion of tax-exempt as rental relief for tenants impacted by COVID-19.

The stability of the REIT’s portfolio enabled its share price to rebound strongly from the low reached of S$1.91 to S$3.14 currently, up 64%.

Gross revenue for the first quarter of 2021 (ended 30 June 2020) dipped slightly by 0.5% year on year, while net property income inched up around 1% year on year to S$78.7 million.

Distributable income rose by 11.6% year on year, while the number of units increased by 8.8% year on year.

Hence, if the REIT had not retained some cash for relief measures, distribution per unit would have seen a year on year rise.

MIT has announced a proposed acquisition of the remaining 60% interest in 14 data centres in the US to increase the REIT’s exposure to this resilient asset class.

The REIT manager is also actively recycling capital by recently announcing the divestment of a seven-storey data centre located in Singapore to Equinix Singapore for S$125 million.

Wilmar International Limited (SGX: F34)

Wilmar is a leading agricultural business group.

The group’s business comprises a wide range of activities, including oil palm cultivation, sugar milling and refining, and rice and flour milling, among others.

Wilmar has over 500 manufacturing plants and a multinational workforce of about 90,000 people.

The group produces essential foods and, therefore, has been allowed to operate uninterrupted throughout the pandemic.

Wilmar’s share price has rebounded strongly off the low of S$2.90 witnessed in March. As of yesterday, it was up 64% to S$4.75.

In its first-half 2020 earnings report, Wilmar saw a 12% year on year rise in revenue to US$22.7 billion.

Core net profit jumped by 49% year on year to US$636 million.

The group declared a higher interim dividend of S$0.04, up from S$0.03 a year ago.

Chairman and CEO Mr Kuok Khoon Hong expects both the group’s Food Products and Feed and Industrial Products divisions to continue to perform well for the remainder of the year.

The increase in palm oil prices will also contribute positively to Wilmar’s Plantations division.

Also, Wilmar’s Chinese subsidiary, Yihai Kerry Arawana Holdings Co., Ltd, has obtained clearance for an IPO on the Shenzhen Stock Exchange.

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

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