It is common to see instances where share prices have been driven down by pessimism.
This pessimism may stem from weak sentiment surrounding the company or a poor set of earnings.
While some of the decline may be justified, there are cases where the pessimism may be too pervasive.
Perceptive investors can identify a good bargain by assessing the fundamentals of the business behind the stock.
A good place to start is to trawl through the list of stocks that are hitting their year-low.
Some of these companies qualify as enticing investment ideas if the troubles swirling around them are temporary.
We feature four companies whose share prices have plunged to their 52-week low to see if they may rebound soon.
CapitaLand China Trust (SGX: AU8U)
CapitaLand China Trust, or CLCT, is a China-focused REIT with a portfolio of 11 shopping malls, five business park properties, and four logistic park properties.
The REIT had total assets under management of around S$5.2 billion as of 30 June 2023.
Units of the REIT have drifted down to their 52-week low of S$0.88 and are down 21.4% year-to-date (YTD).
For the first half of 2023 (1H 2023), gross revenue inched up 0.8% year on year to RMB 947.8 million while net property income (NPI) crept up by the same quantum to RMB 663.7 million.
The weakness of the RMB against the Singapore Dollar caused NPI to decline by 7.4% year on year to S$129.2 million.
As a result, distribution per unit came in 8.8% lower year on year at S$0.0374.
Despite the weaker result, CLCT’s portfolio occupancy was strong at 93.1%.
Its retail portfolio also enjoyed higher shopper traffic and tenant sales, rising by 31.7% and 32% year on year, respectively.
The REIT’s gearing stood at 40.2% with an average cost of debt of 3.54%. Close to three-quarters of its loans are at fixed rates.
Sheng Siong Group (SGX: OV8)
Sheng Siong is one of the largest supermarket operators in Singapore with 68 outlets across the island.
The retailer sells a wide variety of products ranging from live and chilled produce to household items, necessities, and essential products.
Sheng Siong’s share price has skidded by 7.9% YTD and is close to its 52-week low of S$1.50.
The group reported a mixed set of results for 1H 2023.
Revenue and gross profit rose 2% and 3.1% year on year, respectively, to S$690.5 million and S$205.1 million.
Net profit, however, dipped by 2.9% year on year to S$65.5 million because of higher salaries and utility expenses.
The group proposed an interim dividend of S$0.0305.
Sheng Siong expects to continue to tender for HDB spaces to open new stores, and the group expects six locations to be up for tender for the remainder of the year.
Just last week, the retailer announced a new lease agreement for its sixth store in Kunming, China, that will be operational by the end of the second quarter of 2024.
Kimly Ltd (SGX: 1D0)
Kimly is one of the largest coffee shop operators in Singapore and manages an extensive network of food outlets, food stalls, restaurants, and food kiosks.
It also operates a central kitchen and has a food retail division selling Chinese, Western, and Japanese food.
Kimly’s share price has fallen by around 8.6% YTD to around S$0.32, its 52-week low.
The business also reported a mixed result for 1H 2023.
Revenue slipped by 0.9% year on year to S$155.5 million but gross profit fell by 11% year on year to S$42.5 million.
Net profit, however, inched up 0.7% year on year to S$18.7 million.
The group expects the business environment to remain challenging as the food and beverage industry faces escalating input costs and a shortage of manpower.
Inflation also means these workers need to be paid more, putting a bigger strain on the business’s cash flow.
Revenue is also expected to taper off as COVID-19 measures were lifted in October 2022.
Kimly opened a fourth Kedai Kopi outlet, a new coffee shop, and a Tenderfresh restaurant in 1H 2023 and will seek out opportunities to secure more leases to open more food outlets in Singapore.
Nanofilm Technologies (SGX: MZH)
Nanofilm is a provider of nanotechnology solutions and provides technology-based solutions to a wide variety of industries.
The group’s share price has fallen by one-third and recently touched its 52-week low of S$0.92.
For 1H 2023, revenue plunged by 34.4% year on year to S$73.2 million because of a softer consumer electronics market.
This was, in part, due to the slower-than-expected post-reopening recovery of China.
Gross profit declined by 53.1% year on year to S$23.4 million.
Nanofilm ended up reporting a net loss of S$7.9 million, a reversal from the S$18.2 million profit back in 1H 2022.
The group sees a challenging business climate ahead as customers remain tight on capital spending and investments.
Nanofilm, however, is pushing on with its market expansion plans.
Phase one of the construction of a new site in Vietnam has commenced and should be completed by the first quarter of next year.
Over in India, negotiations with a partner are ongoing and Nanofilm hopes to finalise an agreement by the end of 2023.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.