Sometimes, the stock market hands investors a puzzle.
All three of the Straits Times Index’s worst performers for March 2026 reported strong headline results for their latest full year.
Profits surged, dividends were raised, and order books looked healthy.
Yet their share prices lagged behind the rest of the pack.
The common thread? In each case, the market appeared to be reading beyond the headlines — scrutinising cash flow quality, the sustainability of one-off gains, and lurking structural risks.
Let’s take a closer look.
Yangzijiang Shipbuilding: Strong profits, but the cash flow tells a different story
Yangzijiang Shipbuilding (SGX: BS6), or YZJ, one of China’s largest non-state-owned shipbuilders, delivered an impressive set of FY2025 results.
Revenue climbed 7.4% year on year (YoY) to RMB 28.5 billion while gross profit surged 28% to RMB 9.8 billion, as margins expanded from 29% to 34%.
Profit attributable to equity holders rose 30% year on year to RMB 8.6 billion.
The group rewarded shareholders handsomely, proposing a final dividend of S$0.20 per share – a 67% increase over the S$0.12 paid a year ago.
At a share price of S$3.83, this translates to a trailing yield of around 5.2%.
So why did the share price slide from its all-time high of S$4.62 in early March?
The answer may lie in the cash flow statement.
Free cash flow (FCF) fell sharply to RMB 2.5 billion, a fraction of the RMB 11.9 billion generated a year earlier, weighed down by higher working capital requirements and increased capital expenditure for the Hongyuan Yard and LNG terminal project.
Meanwhile, FY2025 order intake came in at US$2.5 billion – a marked step down from the US$14.6 billion secured in FY2024.
Management has set a US$4.5 billion target for FY2026, but the industry’s demand shift from large containerships towards smaller vessel segments may cap the upside.
The group’s outstanding order book of US$22.4 billion, with deliveries stretching through 2030, provides a solid revenue runway – but the market appears to be pricing in a normalisation of the boom years.
City Developments: Profit tripled, but strip out the one-offs and the picture shifts
City Developments (SGX: C09), or CDL, reported FY2025 revenue of S$3.6 billion, up 9.7% YoY, while profit attributable to owners tripled to S$629.7 million.
Those are eye-catching numbers.
But dig a little deeper and a sizeable chunk of that profit surge came from capital recycling gains, notably a S$473.1 million gain from divesting its 50.1% stake in the South Beach mixed-use development.
Strip that out, and the underlying earnings picture looks far less dramatic.
The real concern for the market may be the balance sheet.
FCF was deeply negative at minus S$2.0 billion, driven by land acquisition payments for the Shanghai Xintiandi development site and three Singapore Government Land Sales sites.
Cash stood at S$2.1 billion against total interest-bearing borrowings of S$13.4 billion – a ratio that may give income-focused investors pause.
CDL declared a total ordinary dividend of S$0.280 per share for FY2025, comprising a special interim dividend of S$0.030 and a proposed final dividend of S$0.250.
That represents a 40% payout ratio and a trailing yield of around 3.4% at a share price of S$8.20.
Management remains confident in Singapore’s residential market, with the ultra-luxury Newport Residences launched in January 2026 and a Lakeside Drive project slated for the third quarter of 2026.
But confidence and cash flow are two different things.
CapitaLand Investment: China’s shadow looms large
CapitaLand Investment (SGX: 9CI), or CLI, reported operating PATMI up 6% YoY to S$539 million for FY2025, driven by higher fund management fees and lower finance costs.
Funds under management grew 7% to S$125 billion.
On the surface, the investment management platform is firing on most cylinders.
But total PATMI plunged 70% to just S$145 million.
The culprit: S$436 million in unrealised revaluation losses, predominantly from China.
This single line item wiped out much of the operating progress and underscored the ongoing drag from the group’s China exposure – where approximately S$3 billion of assets remain.
Revenue fell 24% YoY to S$2.1 billion, although the decline was largely due to the deconsolidation of CapitaLand Ascott Trust (SGX: HMN) following a stake sale in December 2024.
Adjusting for this, revenue was broadly stable.
The board maintained the dividend at S$0.120 per share, yielding around 4.4% at a share price of S$2.74.
But total shareholder payouts have effectively shrunk, since FY2024’s dividend included a special in-specie distribution of CapitaLand Integrated Commercial Trust (SGX: C38U), or CICT, units worth S$0.065 per share.
Management is moving to address the China overhang, flagging plans to accelerate divestments and explore a follow-on C-REIT listing.
Whether the market gives CLI credit for these intentions — or waits for execution — remains to be seen.
Get Smart: Look past the headlines
All three blue chips face a common challenge: convincing the market that their headline numbers tell the full story.
YZJ’s profit surge came alongside a sharp drop in free cash flow.
CDL’s tripling of profit was turbocharged by divestment gains, and CLI’s operating progress was overshadowed by China-linked revaluation losses.
For investors eyeing these pullbacks as opportunities, the key question is whether these are temporary growing pains – or early signs of deeper structural shifts.
As always, the devil is in the details.
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Disclosure: The Smart Investor owns shares of CICT.
