Earnings Alert: 4 Singapore Blue-Chip Stocks Well-Positioned to Report Higher Profits

With the earnings season in full swing, it’s time for investors to scrutinise the results from companies they own or are interested in.

In particular, many investors will be interested in how the blue-chip stocks are doing.

Blue chips are well-known for their track record and reputation and can help to provide a layer of stability for any portfolio.

Many of them also pay out a dividend, thus generating a steady stream of passive income for investors.

We feature four prominent blue-chip stocks that look poised to report better earnings when they release their financial results.

DBS Group (SGX: D05)

DBS is Singapore’s largest bank by market capitalisation and offers a comprehensive range of banking, insurance, and investment services for individuals and corporations.

For the first quarter of 2024 (1Q 2024), the lender reported a sparkling set of earnings with both total income and net profit hitting records.

Total income rose 13% year on year to S$5.6 billion on the back of an 8% year-on-year increase in net interest income (NII) to S$3.6 billion.

Net profit came in at S$2.95 billion, up 15% year on year.

An interim dividend of S$0.54 was declared and paid, 42.1% higher than the S$0.38 paid out a year ago.

There may be more to come from the bank.

CEO Piyush Gupta expects DBS’s 2024 group NII to be better than last year.

With interest rates looking set to stay higher for longer, DBS should benefit by seeing its NII hover at current levels,

For non-interest income, he expects this to grow by mid-to-high teens percentage because of healthy momentum in wealth management and treasury customer sales.

Net profit for the bank is projected to be above 2023 levels.

DBS will be releasing its first half of 2024 (1H 2024) earnings on 8 August.

Yangzijiang Shipbuilding (SGX: BS6)

Yangzijiang Shipbuilding, or YZJ, is one of the largest non-state-owned shipbuilding companies in China.

The group has four shipyards in Jiangsu province that can produce a broad range of commercial vessels such as large containerships, bulk carriers, and LNG carriers.

Revenue for 2023 climbed 16.5% year on year to RMB 24.1 billion, driven by higher new-build vessel prices.

Net profit for the year leapt 57% year on year to RMB 4.1 billion, a record-high for the shipbuilder.

Fast forward to 1Q 2024, and YZJ’s order win momentum stayed robust.

As of 24 May 2024, order wins totalled US$3.32 billion, which is at 74% of its full-year target.

At the same time, YZJ also reported a record order book of US$16.08 billion.

This record order book should translate into higher revenue and profits in the quarters to come.

YZJ is also gearing up for expansion by signing a framework agreement with the government of Jinjiang City to acquire land use rights for a plot of land for the establishment of a new clean energy ship manufacturing base.

The group is conducting a feasibility study for this project and if approved, plans to commit around RMB 3 billion in capital expenditure over the next two years.

Sembcorp Industries (SGX: U96)

Sembcorp Industries, or SCI, is an energy and urban solutions provider with a balanced energy portfolio of 21.3 GW comprising 13.8 GW of renewables.

The group also boasts a track record of transforming raw land into sustainable urban developments and has a project portfolio spanning more than 14,000 hectares across Asia.

For 2023, SCI reported a mixed set of earnings that saw its core net profit head higher.

Revenue fell by 10% year on year to S$7 billion but net profit before exceptional items jumped 38% year on year to S$1 billion.

Back then, the group witnessed healthy growth in its renewables portfolio with 4 GW secured since the end of 2022.

Since its 2023 earnings release, the group has stayed busy with multiple business developments that are helping it to grow its business.

Back in June, SCI completed the acquisition of 196 MW of operational wind and solar assets to its portfolio, taking its gross renewable energy capacity to 14.4 GW.

In the same month, the group also secured a long-term power purchase agreement (PPA) with global biopharmaceutical company GSK plc (LON: GSK).

This PPA has a tenure of 10 years and will help to generate recurring income for SCI as it pursues other initiatives.

A heads of terms was also signed with Sojitz Corporation (TYO: 2768) and Kyushu Electric Power Co (TYO: 9508) as part of a consortium to finalise a definitive green ammonia offtake agreement.

SCI will report its 1H 2024 earnings on August 6 before trading begins.

Singapore Exchange Limited (SGX: S68)

Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.

The group reported a robust set of earnings for the first half of fiscal 2024 (1H FY2024) ending 31 December 2023.

Revenue increased by 3.6% year on year to S$592.2 million while core net profit (excluding exceptional and one-off items) improved by 6.2% year on year to S$251.4 million.

SGX’s latest market statistics report holds good promise for its upcoming FY2024 earnings release.

Total derivatives traded volume increased by 5% year on year for June to 22.4 million contracts.

More importantly, derivatives volume and daily average volume (DAV) each gained 8% year on year for the period from July 2023 to June 2024.

FY2024’s volumes for foreign exchange futures jumped 35% year on year to 4.5 million contracts.

Commodity derivatives traded volume also increased by 30% year on year to 5.1 million contracts.

Over at the newly-launched GIFT connect, GIFT Nifty 50 futures DAV and open interest climbed to new records of US$5.1 billion and US$11 billion, respectively.

With these statistics, investors can expect SGX to report a strong set of earnings when it releases its FY2024 results on 8 August before the market opens.

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Disclosure: Royston Yang owns shares of DBS Group and the Singapore Exchange.

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