Blue-chip stocks are famed for their long track record, stability, and ability to weather downturns.
However, some of them may encounter stumbling blocks along the way that affect their business profits and prospects.
When this happens, investors may turn pessimistic and dump the stock, causing its share price to fall.
If the problems are temporary, this decline could represent a good opportunity to accumulate shares at attractive valuations.
Here are three blue-chip stocks that may be ready to post a rebound.
Genting Singapore (SGX: G13)
Genting Singapore is the owner and operator of Resorts World Sentosa (RWS), an integrated resort (IR) spanning 49 hectares featuring six hotels, a casino, one of the world’s largest aquariums, a Universal Studios Singapore (USS) theme park, and a wide selection of dining, retail, and entertainment options.
Genting’s share price has fallen by around 17% year-to-date (YTD) and is trading near its 52-week low of S$0.82.
The group delivered a strong set of earnings for the first quarter of 2024 (1Q 2024).
Total revenue jumped 62% year on year to S$784.4 million with gaming revenue surging by 69% year on year to S$576 million as tourists flooded back to RWS.
Net profit soared 92% year on year to S$247.4 million.
Looking ahead, the relaxation of visa regulations between China and Singapore should see more Chinese tourists visiting the island.
RWS also hosted Sneaker Con Southeast Asia 2024 in March, which showcases the IR’s popularity for Meetings, Incentives, Conventions and Exhibitions (MICE) events.
Later this year, the IR operator will host the immersive exhibition Harry Potter: Visions of Magic, which will be the first in Asia.
Back in May, Genting Singapore also signed a Memorandum of Understanding with Sentosa Development Corporation, DBS Group (SGX: D05), and the Singapore Tourism Board to establish a collaborative Sentosa Precinct Partnership.
This partnership looks set to boost the appeal of Sentosa to tourists and locals and should attract higher visitor numbers to RWS.
Meanwhile, construction works are proceeding smoothly for the new Minion Land attraction in USS and the Singapore Oceanarium and will open in phases starting from 1Q 2025.
The former Hard Rock Hotel is undergoing extensive renovation and will be relaunched as a new all-suite luxury hotel when it reopens in early 2025.
These new attractions and openings should spur more visitors and boost Genting Singapore’s fortunes in the quarters to come.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 187 properties across eight countries.
Its assets under management (AUM) stood at S$13.2 billion as of 31 March 2024.
MLT’s unit price has tumbled by 26.3% YTD to close at its 52-week low of S$1.26.
The REIT reported a mixed set of earnings for the fiscal year 2024 (FY2024) ending 31 March 2024.
Gross revenue inched up 0.4% year on year to S$733.9 million while net property income remained flat year on year at S$634.9 million.
Distribution per unit (DPU) slipped by 0.1% year on year to S$0.09003.
The manager of the REIT spooked the market by stating that replacement loans and hedges would be refinanced at significantly higher than current interest rates.
Despite this warning, we believe MLT can continue to do well.
The REIT posted a positive rental reversion of 2.9% for its latest quarter and saw portfolio occupancy stay high at 96%.
The logistics REIT also completed S$1.1 billion of acquisitions in FY2024 and divested nine properties in Malaysia, Singapore, and Japan, all at premiums to their book values.
There may be some respite coming for the REIT.
The US Federal Reserve could be looking at cutting interest rates because of lower inflation along with a weakening labour market.
Venture Corporation (SGX: V03)
Venture Corporation is a provider of technology products, services, and solutions.
The group serves several Fortune 500 companies and has customers in technology domains such as life sciences, genomics, molecular diagnostics, healthcare, and medical devices, to name a few.
Venture’s share price rose just 1.4% YTD and the group could be well-positioned for a rebound as the semiconductor sector downturn runs its course.
For 1Q 2024, Venture’s revenue fell by nearly 19% year on year to S$666.7 million.
Net profit came in at S$60.1 million, down 18.3% year on year.
Management attributed the poor showing to lower overall customer demand but mentioned that the remaining headwinds are beginning to taper off.
The group still generated a positive operating cash flow of S$132.9 million for the quarter.
Venture is confident that its revenue for the second half of 2024 will exceed that of the first half.
Meanwhile, the group is also onboarding new customers in the precision engineering, and electronic manufacturing services businesses, which includes those in the medical technology and lifestyle sectors.
Demand is strengthening for the remainder of 2024, according to feedback from its customers.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
