With dark clouds swirling over the economy, Singapore has reduced its economic outlook for 2023.
Although the country narrowly avoided a technical recession, industrial output and exports have fallen for nine straight months.
The Ministry of Trade and Industry now expects GDP to grow between 0.5% to 1.5%, down from the previous range of 0.5% to 2.5%.
In times like these, investors should turn to reliable blue-chip stocks to help weather the downturn.
It is crucial to select well-managed businesses with a track record of performance that can stand resilient against the storm.
Here are four solid blue-chip stocks you can depend on to help your investment portfolio through tough times.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is a logistics REIT with a portfolio of 193 properties spread across eight countries.
Its assets under management stood at S$13.5 billion as of 30 June 2023.
MLT’s properties enjoy strong demand because of the e-commerce boom following the pandemic, and this is likely to carry on for the foreseeable future.
The REIT is also anchored by a strong sponsor in Mapletree Investments Pte Ltd, which is wholly owned by Temasek Holdings.
For its fiscal 2024’s first quarter (1Q FY2024) ending 30 June 2023, MLT saw gross revenue slip 2.9% year on year to S$182.2 million because of unfavourable currency movements.
Net property income fell by 3.1% year on year to S$158.1 million due to higher interest rates.
Distribution per unit, however, edged up 0.1% year on year to S$0.02271.
MLT also reported a high portfolio occupancy rate of 97.1% while enjoying a positive average rental reversion of 4.2%.
With 82% of its loans hedged to fixed rates, the industrial REIT need not worry about a sharp spike in finance costs.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology and engineering group with products and services catered to the aerospace, smart city, defence, and public security sectors.
The group reported a strong performance for its fiscal 2023’s first half (1H 2023) results.
Revenue rose year on year across all three of its divisions while core net profit jumped 26% year on year to S$300 million.
STE also generated a positive free cash flow of S$521.1 million for the period.
The group continues to see a strong recovery in commercial aerospace and enjoyed growth in its international defence business.
The engineering conglomerate snagged a total of around S$9.5 billion in new contracts in 1H 2023, lifting its order book to a new high of S$27.7 billion as of 30 June 2023.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is a real estate company with a diverse portfolio of residences, offices, retail malls, and integrated developments spanning 143 locations in 28 countries and regions.
The developer reported a sparkling set of earnings for 1H 2023 as it saw its core net profit before tax jump 48% year on year.
The group has total assets of S$23 billion as of 30 June 2023 which allows it to weather cyclical economic storms.
It also has a Singapore residential pipeline of more than 1,100 units and is slowly building scale in the UK private rented and purpose-built student accommodation sectors.
CDL is undertaking redevelopment initiatives to increase the gross floor area of properties such as Central Mall, Central Square, and Newport Plaza.
Over at its hotel division, occupancy and average room rates have increased year on year as the rebound in tourism and air travel continues.
An interim dividend of S$0.04 per share was declared for 1H 2023.
Hongkong Land Holdings Ltd (SGX: H78)
Hongkong Land, or HKL, is a property development, investment, and management group that owns and manages more than 850,000 square metres of prime office and luxury retail properties in Asian cities such as Singapore, Hong Kong, Jakarta, and Beijing.
The group pulled off a resilient performance for 1H 2023.
Although revenue fell by 25% year on year to US$670.3 million, underlying net profit dipped by just 1% year on year to US$422 million.
HKL also generated a positive free cash flow of US$224.6 million for 1H 2023, reversing the negative free cash flow in the prior year.
Despite the weaker top-line performance, the property behemoth kept its interim dividend constant at US$0.06 per share.
Management has big plans as it targets to open 10 retail developments in seven cities across China within the next five years.
The group will also complete its US$8 billion West Bund Financial Hub development in Shanghai in three phases through 2027, with the high-end waterfront developments ready for sale by 2024.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
