Time flies, and the next earnings season is almost upon us.
Investors will be interested to know how the blue-chip stocks have fared, especially after the Straits Times Index (SGX: ^STI) hit a 17-year high.
Warren Buffett was quoted as saying – if the business does well, the stock eventually follows.
So, if you are looking for healthy capital gains for your portfolio, it pays to study the business to find out which can grow its profits and cash flows.
Here are five prominent blue-chip stocks that are well-positioned to report better earnings in the upcoming results season.
OCBC Ltd (SGX: O39)
OCBC is Singapore’s second-largest bank and offers a comprehensive range of banking, insurance, and investment services to individuals and corporations.
The lender reported a strong set of earnings for the first half of 2024 (1H 2024).
Total income rose 7% year on year to S$7.3 billion on the back of a 3% year-on-year increase in net interest income to S$4.9 billion.
Non-interest income climbed 15% year on year to S$2.4 billion, buoyed by higher trading income and earnings from OCBC’s life insurance arm.
Net profit for 1H 2024 came in at S$3.9 billion, up 9% year on year, and stood at a record high.
The bank upped its interim dividend by 10% year on year from S$0.40 to S$0.44.
Even though the US Federal Reserve lowered interest rates by 0.5 percentage points last month, OCBC should still post healthy profit growth.
The bank expects low single-digit loan growth and its net interest margin should remain resilient in the range of between 2.2% to 2.25%.
Non-interest income should continue to be strong as consumer sentiment should improve with lower rates, thus boosting credit card spending.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with a portfolio of 26 properties.
21 of these are in Singapore, two in Germany, and three in Australia, and the REIT’s assets under management (AUM) stood at S$24.5 billion as of 31 December 2023.
CICT reported a solid set of earnings for 1H 2024 with gross revenue inching up 2.2% year on year to S$792 million.
Net property income rose 5.4% year on year to S$582.4 million, demonstrating good cost control as the increase was more than the rise in revenue.
Distribution per unit (DPU) climbed 2.5% year on year to S$0.0543.
CICT looks poised to continue with its track record as the REIT had upped its DPU for three consecutive years without fail.
The REIT also saw strong positive rental reversion of 9.3% for its retail portfolio and 15% for its office portfolio.
Recently, the REIT announced the acquisition of a 50% stake in ION Orchard that will lift its 1H 2024 DPU by 0.9%.
CICT also has two ongoing asset enhancement projects for the IMM Building and Gallileo in Frankfurt that can help to contribute to organic rental income growth.
Keppel Ltd (SGX: BN4)
Keppel is a global asset manager that provides solutions in the areas of infrastructure, real estate, and connectivity.
The group posted a mixed set of results for 1H 2024.
Revenue fell by 13% year on year to S$3.2 billion, largely because of year-on-year revenue declines for the Infrastructure and Real Estate segments.
Net profit, however, mounted a decent 7% year on year rise to S$513 million after excluding the legacy offshore and marine assets.
There could be better times ahead for Keppel.
Its funds under management (FUM) grew by 55% from the end of 2023 till 1H 2024 with asset management profit more than doubling year on year to S$75 million.
The group is also on track to achieve annual cost savings of $S60 million to S$70 million by the end of 2026.
Keppel targets for its FUM to hit S$200 billion by 2030, which should bring in significantly higher asset management fees that will boost the group’s overall revenue.
There is also growing demand for its integrated power business which saw operating income jump 21% year on year to S$317 million for 1H 2024.
Singapore’s electricity demand is projected to grow by between 3.7% to 5.7% annually till 2030, which should provide ample growth opportunities for this division.
Genting Singapore (SGX: G13)
Genting Singapore is the owner and operator of the integrated resort (IR) at Resorts World Sentosa (RWS).
RWS boasts a casino, a Southeast Asian aquarium, six hotels with more than 1,600 rooms, and a myriad of entertainment, dining, and retail options.
The IR operator announced a strong set of earnings for 1H 2024 as the travel recovery boosted both its top and bottom lines.
Revenue jumped 25% year on year to S$1.4 billion while net profit climbed 29% year on year to S$356.9 million.
Genting Singapore paid out an interim dividend of S$0.02, higher than the S$0.015 a year ago.
The travel recovery is expected to continue into the remainder of 2024, which should help to boost the group’s financial numbers.
Also, the first phase of the RWS upgrade, aptly named “RWS 2.0” is slated to have a soft launch in the early part of 2025.
These offerings comprise Illumination’s Minion Land along with the Singapore Oceanarium as well as an all-suite hotel to replace the old Hard Rock Hotel.
These new attractions should attract more visitors to come to RWS, helping to lift Genting Singapore’s top and bottom lines for 2025.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology and engineering group that offers services and solutions to the aerospace, smart city, defence, and public security segments.
The engineering giant reported a sparkling set of earnings for 1H 2024 with revenue rising 13.5% year on year to S$5.5 billion.
Operating profit climbed 17.7% year on year to S$522.9 million while net profit improved close to 20% year on year to S$336.5 million.
STE snagged a total of S$6.1 billion of new contracts in 1H 2024, bringing its order book to S$27.9 billion as of 30 June 2024.
This level of orders is slightly higher than the S$27.7 billion reported in 1H 2023.
2H 2024 should see a better performance as S$4.9 billion of these orders is expected to be delivered, higher than the S$4.4 billion in the prior year.
Want to protect your child’s money from inflation? Transform your child’s ‘piggy bank’ into a ‘golden goose’ that keeps giving even until they have grandchildren. Our latest FREE report shows you a stress-free method and 3 superstar stocks that could protect your child’s money from inflation. Click HERE to get a copy of our latest guide.
Disclosure: Royston Yang does not own shares in any of the companies mentioned.
