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5 Promising Singapore Blue-Chip Stocks That Could Outperform the Market in 2023

Satellite Communication
Satellite Communication

As 2022 draws to a close, many investors will be breathing a sigh of relief.

Although the year had started out promising, the mood gradually darkened as the twin worries of inflation and high interest rates pummelled the market.

Sentiment dived as investors fret over corporate earnings amid reduced consumer demand.

Growth stocks, as a whole, fell sharply as expectations had to be readjusted downwards.

As we head into 2023, it’s prudent to take steps to protect your investment portfolio.

Blue-chip stocks offer certainty and stability so that you have peace of mind.

What’s more, some of them are still growing despite the headwinds faced.

Here are five promising blue-chip companies that could do better than the market in 2023.

Genting Singapore Ltd (SGX: G13)

Genting Singapore owns and operates the Resorts World Sentosa (RWS) Integrated Resort (IR).

RWS boasts attractions such as the SEA Aquarium, Dolphin Lagoon, and Universal Studios Singapore, and also features a casino and six luxury hotels.

As borders reopened, the group benefited from an influx of tourists who patronised its gaming and non-gaming attractions.

For the third quarter of 2022 (3Q2022), gaming revenue nearly doubled year on year to S$382 million.

Non-gaming revenue soared 144.3% year on year to S$137.3 million.

Net profit for the quarter surged by 123.6% year on year to S$135.8 million.

Tourism should continue to boom next year as people indulge in “revenge spending” after being cooped up for two years.

Singapore Airlines Limited (SGX: C6L) plans to increase flights to destinations in east and southeast Asia next year, including South Korea and Australia.

This move should benefit Genting’s business as more tourists flow into Singapore.

Wilmar International Limited (SGX: F34)

Wilmar is an integrated agribusiness group that encompasses the entire value chain of the agricultural commodities business.

The group has more than 500 manufacturing plants and employs more than 100,000 staff.

Wilmar reported a strong set of earnings for 3Q2022, with revenue rising 10.2% year on year to US$18.9 billion.

The agribusiness group’s core net profit jumped 38.2% year on year to US$796.7 million.

Sales volume for both its food products and feed & industrial products divisions saw single-digit year on year increases while operating cash flow climbed 68.2% year on year to US$3.5 billion.

Wilmar’s business model should position it well to capture more business in 2023 as it taps into its diversified operations for opportunities.

Keppel DC REIT (SGX: AJBU)

Keppel DC REIT is a data centre REIT with a portfolio of 23 data centres spread out across nine countries.

Assets under management (AUM) stood at S$3.6 billion as of 30 September 2022.

The REIT reported an encouraging set of earnings for 3Q2022.

Gross revenue inched up 1.4% year on year to S$70.3 million with net property income (NPI) edging up 0.5% year on year to S$64.1 million.

Distribution per unit (DPU) rose 5% year on year to S$0.02585.

Looking ahead, the world’s data usage continues to rise exponentially, creating essential demand for more data centres.

In such an environment, Keppel DC REIT should continue to do well as its assets see strong demand.

With aggregate leverage at 37.5%, the REIT can tap on debt to conduct more acquisitions to raise DPU.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust, or MLT, owns a portfolio of 186 properties across eight countries with an AUM of S$12.9 billion as of 30 September 2022.

The logistics REIT reported a 3.5% year on year increase in DPU to S$0.02248 for its fiscal 2023’s second quarter (2Q2023) on the back of an 11.4% year on year rise in gross revenue to S$183.9 million.

MLT’s portfolio occupancy remained healthy at 96.4% and the REIT reported a positive average rental reversion of 3.5% for the quarter.

Investors can look forward to steadily increasing revenue and NPI as the REIT embarked on the acquisition of two land parcels in Malaysia and a redevelopment project at 51 Benoi Road in Singapore.

Meanwhile, the REIT also has ample opportunities to engage in further acquisitions with a gearing level of just 37%.

Singapore Technologies Engineering Ltd (SGX: S63)

Singapore Technologies Engineering Ltd, or STE, is a technology and engineering group serving customers in more than 100 countries.

For the first nine months of 2022 (9M2022), STE saw its revenue rise 19% year on year to S$6.5 billion.

The group’s digital business also saw healthy traction, hitting around S$290 million in revenue for 9M2022, significantly higher than the S$170 million chalked up in 2020.

The division is on track to meet its 2026 revenue target of S$500 million.

The engineering specialist snagged S$4.8 billion of new contracts in 3Q2022, significantly more than the S$3.1 billion it reported in the previous quarter.

STE reported a record order book of S$25 billion as of 30 September 2022, significantly higher than its 2019 pre-COVID order book of S$15.3 billion.

This high order book should stand the group in good stead to do well in 2023.

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Disclaimer: Royston Yang owns shares of Keppel DC REIT.

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