The just-completed earnings season has shed light on how businesses are performing.
With dark clouds looming on the horizon, investors are curious to know how companies are coping.
Some have seen their profits falling as high inflation has pushed up their expenses.
Others, however, have reported robust earnings as they maintain a strong franchise while riding on various tailwinds.
Share prices are tied to how much profit and cash a business can generate.
We highlight five stocks with suitable catalysts that could see their share prices heading higher as they grow both their profit and cash flow.
Genting Singapore (SGX: G13)
Genting Singapore is the owner and operator of the integrated resort (IR) at Resorts World Sentosa (RWS) in Singapore.
The IR features six hotels with around 1,600 hotel rooms, a casino, a Universal Studios theme park, and a variety of retail, dining, and entertainment options.
Genting Singapore reported a sparkling set of results for 2022.
Revenue surged 62% year on year to S$1.7 billion as borders reopened and more tourists visited the IR’s attractions.
Net profit for 2022 soared 85% year on year to S$340.1 million.
With better results, Genting Singapore also doubled its final dividend from S$0.01 in 2021 to S$0.02 last year.
There may be more good news for the IR operator as more international visitors come to Singapore.
The group’s expansion projects are also bearing fruit, with a refurbished theatre space opening this month and a newly-renovated Festive Hotel re-launching in May 2023.
Straco Corporation Limited (SGX: S85)
Straco is a developer and operator of tourism facilities located in China and Singapore.
The group owns the Shanghai Ocean Aquarium, Underwater World Xiamen, and the iconic Singapore Flyer, a giant observation wheel.
The group reported a 32.7% year-on-year fall in revenue for 2022 to S$28.2 million as its attractions in China had their operations disrupted by the country’s COVID-zero policies.
As a result, Straco reported a loss of S$10.8 million, reversing its net profit of S$11.6 million in 2021.
Despite the weaker results, the group still maintained a strong cash balance of S$150.7 million with total debt of just S$8 million.
With China relaxing its COVID policies and opening its borders in January this year, Straco is optimistic that it can enjoy a strong rebound in visitor numbers for 2023.
Food Empire (SGX: F03)
Food Empire manufactures and sells instant beverages and snack foods in over 50 countries.
The group operates eight manufacturing facilities in five countries and has 23 offices worldwide.
Food Empire saw its 2022 revenue climb 24.5% year on year to US$398.4 million while gross profit improved by 26.9% year on year to US$118.8 million.
Net profit soared more than three-fold year on year to US$60.1 million.
Food Empire expects to grow its Vietnam revenue this year as it prepares to expand its production capacity.
The group’s Indian coffee plants are operating at full capacity, supported by international demand, and management expects this division to perform better in 2023.
Wilmar International Limited (SGX: F34)
Wilmar is an agribusiness group with over 500 manufacturing plants and an extensive distribution network spanning multiple countries.
Revenue for 2022 rose 11.6% year on year to US$73.4 billion, underpinned by a good performance from the tropical oils business and better margins from sugar merchandising.
Wilmar’s core net profit jumped 31.3% year on year to US$2.4 billion.
The agribusiness giant also paid out a dividend of S$0.17 for 2022, a record high.
Looking ahead, management expects China to perform better due to its reopening but warned that palm processing margins may come under pressure.
However, Wilmar will work hard to expand its footprint and to also strengthen the integration across its various divisions.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries, or SCI, is a utility and urban solutions provider with a balanced energy portfolio of 16.7 GW and an urban development project portfolio spanning 12,000 hectares across Asia.
SCI reported an impressive set of earnings for 2022 where it saw its net profit more than triple year on year.
The group saw strong performance for its renewables segment as it completed acquisitions in China.
Higher power prices in the UK and Singapore also contributed to a better performance at its Conventional Energy division.
SCI has unveiled several initiatives to continue its growth.
GoNetZero, the group’s carbon management solutions corporate venture, collaborated with Instituto Totum to scale the renewable energy certificate market in Brazil.
Elsewhere, SCI was also awarded its first greenfield renewable project in the Middle East to build a 500 MW solar plant in the Sultanate of Oman.
In our latest Special FREE Report, we cover the best performing stocks and blue chips in the Singapore market in 2022. Look forward to 2023 as we cover the industries and sectors that are poised to do well in the year ahead. Click HERE to download for free now.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
