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3 Singapore Blue-Chips with Share Prices at a 52-Week Low: Are They a Bargain?

Vivocity
Vivocity

It has not been an easy time for stock markets this year.

The twin worries dogging investors are high inflation and surging interest rates.

Because of these headwinds, many stocks suffer from poor sentiment and are seeing their share prices slide.

Higher costs are also eating into corporate profits, causing many businesses to report a lower year-on-year net profit.

Despite these troubles, there could be buying opportunities for the value investor.

Blue-chip stocks are well-known for their resilience and track record.

Some of them may have been unfairly punished by the bearish sentiment and pessimism.

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We sift out three Singapore blue-chip stocks whose share prices have hit a 52-week low to determine if they could be bargains in the making.

City Developments Limited (SGX: C09)

City Developments Limited, or CDL, is a global real estate company with a network spanning 143 locations in 28 countries and regions.

It has a geographically diversified portfolio comprising residences, offices, hotels, student accommodation, retail malls, and integrated developments.

Shares of the property giant have slid close to 20% year-to-date (YTD) to end at S$6.54, a 52-week low.

CDL reported an encouraging financial performance for the first half of 2023 (1H 2023).

Revenue surged 83.6% year on year to S$2.7 billion while gross profit improved by 34.8% year on year to S$786.5 million.

Net profit plunged from S$1.1 billion in 1H 2022 to S$66.5 million but this was because of the absence of a one-off exceptional divestment gain in the prior year.

Excluding these one-off items, CDL’s pre-tax profit would have risen by 48.1% year on year.

A special interim dividend of S$0.04 was declared.

CDL has a launch pipeline of more than 1,100 units for its Singapore residential portfolio.

Upcoming launches include an executive condominium in Bukit Batok to be launched in 1H 2024.

The group has also continued to bulk up its Japan investments with two recent acquisitions.

In August, CDL purchased the bespoke hotel Osaka Shinsaibashi, a 256-room freehold hotel in Osaka’s famous commercial district, for around S$78.5 million.

Late last month, the blue-chip property group invested S$321.9 million in 25 freehold assets in Tokyo to bulk up its private rental sector division.

CDL is also enjoying a strong rebound in its hotel division with the average room rate rising 18.3% year on year to S$216.8 and revenue per available room surging 42.7% year on year to S$151.5.

The group has ongoing enhancement initiatives for Central Mall, Central Square and Newport Plaza that will result in a gross floor area uplift, thereby bringing in higher rental income.

Venture Corporation Limited (SGX: V03)

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

The group is staffed by more than 12,000 employees and serves customers in the life science, genomics, medical devices, and healthcare sectors, among others.

Venture’s shares have declined by 29.4% YTD to touch its 52-week low of S$12.05.

In line with the semiconductor cyclical downturn, the technology group has reported a downbeat set of earnings for 1H 2023.

Revenue dipped by 11.9% year on year to S$1.6 billion while net profit tumbled nearly 20% year on year to S$140 million.

Despite the lower profit, Venture maintained its interim dividend of S$0.25 per share.

Elsewhere, the group also saw free cash flow soar more than five-fold year on year from S$39.9 million to S$229.4 million.

Venture is working on several initiatives to drive revenue and profitability.

One of these is to work with customers and partners who are shifting their manufacturing out of Southeast Asia.

Meanwhile, new customer acquisitions and new product introduction activities are also gaining traction but will take time to bear fruit.

Mapletree Pan Asia Commercial Trust (SGX: N2IU)

Mapletree Pan Asia Commercial Trust, or MPACT, is a retail and commercial REIT with 18 properties across Singapore, Hong Kong, China, Japan, and South Korea.

The portfolio is valued at S$16.6 billion as of 31 March 2023.

MPACT’s unit price has slid by 16.2% YTD to close at its 52-week low of S$1.40.

For the first quarter of fiscal 2024 (1Q FY2024), the REIT reported a 75.6% year-on-year jump in revenue to S$237.1 due to the merger in the prior fiscal year.

Net property income improved by 68% year on year to S$179.2 million.

However, distribution per unit (DPU) fell by 12.8% year on year to S$0.0218 because of higher finance costs and weaker exchange rates.

Despite the weaker results, portfolio committed occupancy stayed high at 95.7% with an overall positive portfolio rental reversion of 2.4%.

The asset enhancement works for VivoCity were also completed in May 2023, with around 80,000 square feet of space reconfiguration introducing new lifestyle and food and beverage offerings.

These works are projected to bring in an estimated return on investment of more than 20%.

Over in Festival Walk in Hong Kong, the REIT manager held fun events to draw in customers while renewing the tenant mix and refreshing the stores to increase their appeal.

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

The post 3 Singapore Blue-Chips with Share Prices at a 52-Week Low: Are They a Bargain? appeared first on The Smart Investor.