The Central Provident Fund (CPF) scheme is an effective one to help Singaporeans to save for retirement.
However, the CPF Ordinary Account (OA) only pays an interest rate of 2,5%, which can be tough to keep pace with inflation.
Hence, investors should look for suitable stocks to park their money in so that they can grow their CPF savings at a quicker rate.
In comes the CPF Investment Account (IA), a part of the CPF OA which allows you to invest some of your CPF funds into stocks and unit trusts.
We introduce three dependable Singapore stocks that can help you to effectively grow your CPF IA.
Sheng Siong (SGX: OV8)
Sheng Siong is one of the largest supermarket chains in Singapore with 73 outlets across the island.
The group sells a wide variety of products including live and chilled seafood, daily necessities, toiletries, and essential household products.
The retailer reported a strong set of earnings for the first half of 2024 (1H 2024).
Revenue inched up 3.4% year on year to S$714.2 million while gross profit improved by 4.8% year on year to S$215 million.
The supermarket operator’s gross margin continued its rise, going from 29.7% in 1H 2023 to 30.1% in 1H 2024.
Net profit clocked in at S$70 million, up 6.8% year on year.
The group also generated a positive free cash flow of S$86.7 million, up nearly 20% year on year from the S$72.3 million churned out a year ago.
An interim dividend of S$0.032 was declared, slightly higher than the S$0.0305 paid a year ago.
Sheng Siong has opened two new stores in 1H 2024 and aims to open at least three new stores per year.
The retailer has made progress in extending its presence in Singapore by expanding the retail area for one store and opening another two in July 2024.
In addition, the group has tendered for three new stores and is awaiting the results of the tender.
Group CEO Lim Hock Chee is optimistic about Sheng Siong’s prospects, stating that HDB will put up seven new stores for tender in 2H 2024.
Over in China, the supermarket operator has opened its sixth store in June 2024, bringing its total there to six.
Grand Banks Yachts (SGX: G50)
Grand Banks Yachts, or GBY, is a manufacturer of luxury recreational motor yachts.
The group manufactures yachts under the Grand Banks, Eastbay, and Palm Beach brands out of its manufacturing yard in Pasir Gudang in Malaysia.
The yacht manufacturer reported a robust set of earnings for its fiscal 2024 (FY2024) ending 30 June 2024.
Revenue rose 17.1% year on year to S$133.7 million, buoyed by higher boat-building activities at its Pasir Gudang yard.
Gross profit leapt nearly 38% year on year to S$50.7 million while net profit more than doubled year on year to S$21.4 million.
This marks the ninth consecutive year of net profit for the group and FY2024 has seen its highest-ever net profit.
The yacht manufacturer also generated a positive free cash flow of S$4.3 million for the fiscal year.
The group declared a final dividend of S$0.01 and coupled with its interim dividend of S$0.005, this brings FY2024’s total dividend to S$0.015.
The group recorded 20 new boat orders which brought its order book to S$120 million as of 30 June 2024.
GBY is completing its new single-storey facility at Pasir Gudang which will increase usable floor space by over 25%.
The group is also investing in new machinery that will enhance capacity, reduce delivery times, and broaden GBY’s range of yachts produced to include larger, sleeker, and more energy-efficient models.
StarHub (SGX: CC3)
Starhub is a telecommunication company (telco) that offers mobile, broadband, and pay TV services for consumers along with cybersecurity, artificial intelligence, and data analytics services for corporations.
The telco announced an encouraging set of earnings for 1H 2024 that saw total revenue (excluding D’ Crypt) inch up 1% year on year to S$1.1 billion.
Net profit grew 8.7% year on year to S$83.3 million because of lower finance costs, taxation, depreciation, and amortisation.
Starhub also generated a healthy positive free cash flow of S$101.6 million for 1H 2024.
An interim dividend of S$0.03 was declared, up from the S$0.025 paid out a year ago.
Management intends to execute its strategic priorities to complete the majority of its DARE+ investments by 2024 which were described during its 2023 Investor Day.
The group also plans to introduce cross-product bundling for its consumer segment while harvesting growth from its new platforms in 2025.
Starhub has reiterated its guidance of at least S$0.06 in dividends for 2024.
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Disclosure: Royston Yang does not own any of the companies mentioned.
