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4 Singapore Blue-Chip Stocks with the Potential to Grow Their Profits

Sentosa, tourism, RWS, casino, resorts world sentosa
Sentosa, tourism, RWS, casino, resorts world sentosa

Blue-chip stocks are famed for their reputation and stellar track record through different economic cycles.

For investors seeking stability and peace of mind, these stocks act as the bedrock for their portfolios.

Blue-chip stocks that demonstrate the ability to grow their earnings and cash flows will be accorded higher share prices, thus bestowing capital gains to their investors.

As a bonus, most blue-chip stocks also dish out reliable dividends.

Here are four blue-chip stocks that could see their profits rise in line with catalysts for their business.

City Developments Limited (SGX: C09)

City Developments Limited, or CDL, is a property company with a network spanning 163 locations in 29 countries and regions.

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Its diverse portfolio of real estate includes residences, offices, hotels, serviced apartments, retail malls, and integrated developments.

The group released an encouraging business update for the first quarter of 2024 (1Q 2024).

A total of 429 units were sold, bringing in sales revenue of S$736.8 million.

This performance was significantly better than 1Q 2023’s sale of just 88 units worth S$213.2 million and was driven by the launch of Lumina Grand, a 512-unit executive condominium in Bukit Batok.

CDL has also substantially sold its residential inventory in China.

Eling Palace is fully sold with Hong Leong City Center and Hongqiao Royal Lake enjoying sales of 92% and 91%, respectively.

The property giant plans to launch two new residential projects in the second half of 2024, Union Square Residences (366 units) and Champions Way (348 units).

In line with the group’s rejuvenation strategy, it will invest S$50 million in an asset enhancement initiative (AEI) for City Square Mall, which commenced in the third quarter of last year.

Full completion is expected in the first half of 2025 for the two-phase AEI.

Meanwhile, CDL also announced the completion of the acquisition of the Hilton Paris Opera Hotel, helping to add to its portfolio of hospitality properties.

Genting Singapore (SGX: G13)

Genting Singapore owns and operates the integrated resort (IR) at Resorts World Sentosa (RWS).

The IR boasts six hotels with around 1,600 rooms, a casino, a Universal Studios theme park, and numerous dining, retail, and entertainment options.

The group reported a strong set of earnings for 1Q 2024 as tourism rebounded strongly in the North Asian region with the reopening of borders.

Revenue surged by 62% year on year to S$784.4 million while net profit soared 92% year on year to S$247.4 million.

There could be more to come for the IR operator.

In early May, RWS signed a memorandum of understanding with Sentosa Development Corporation, DBS Bank (SGX: D05), and Singapore Tourism Board, to establish a collaborative Sentosa Precinct Partnership.

This initiative, along with the hosting of the Asia premiere of Harry Potter: Visions of Magic later this year, should increase the IR’s appeal.

Elsewhere, construction works for the new Minion Land and the Singapore Oceanarium are on track and these two attractions are set to open in phases from 1Q 2025.

Singtel (SGX: Z74) 

Singtel is Singapore’s largest telecommunication company and offers a comprehensive range of mobile, pay TV, and broadband services.

The telco reported a resilient set of earnings for its fiscal 2024 (FY2024) ending 31 March 2024.

Underlying net profit grew 10% year on year to S$2.3 billion and the telco hiked its FY2024 by 52% year on year to S$0.15.

Management will focus on lifting core performance at Singtel Singapore and Optus, its Australian subsidiary.

In addition, the telco also plans to scale up its growth engines Nxera, its data centre division, and build up its Paragon-X enterprise platform.

Aside from these moves, Singtel has also identified around S$6 billion of assets slated for recycling which will help the group to sustain its new value realisation dividend.

Singtel introduced ST28, a new growth plan to enhance customer experience and deliver sustainable value for shareholders.

This new long-term strategy will help the group to optimise its core business, scale its growth engines, and deploy capital expenditure which will be funded by external partners.

Over time, management aims to deliver growth in both profits and dividends to shareholders.

Singapore Technologies Engineering (SGX: S63)

Singapore Technologies Engineering, or STE, is a technology, defence, and engineering group that serves customers across the aerospace, smart city, and public security sectors.

Revenue for 2023 rose 11.8% year on year to S$10.1 billion while operating profit jumped 24.4% year on year to S$914.7 million.

Underlying net profit after excluding one-off expenses shot up 24% year on year to S$610 million.

The momentum has carried over into 1Q 2024 as the group’s revenue was 18% higher than the previous year at S$2.7 billion.

STE snagged S$3 billion of new contracts in 1Q 2024, taking its order book to S$27.7 billion as of 31 March 2024.

Around S$6.5 billion of these contracts are expected to be delivered for the remainder of 2024.

Management is confident that its digital business can triple to more than S$500 million by 2026 as it focuses on cloud, artificial intelligence, and cybersecurity.

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Disclosure: Royston Yang owns shares of DBS Group.

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