Share prices can soar for a wide variety of reasons.
These may range from positive sentiment or sustainable tailwinds to a company snagging a large contract.
While it’s always a happy event to see the value of your stocks increase, it’s also important to analyse the reasons behind it.
If sentiment was buoyed by high expectations that are ultimately not met, the share price could come tumbling down again.
But if the business shows a sustained trend of rising profits, cash flow and dividends, it is a clearer sign that the share price rise is justified.
Here are four Singapore stocks that recently hit their 52-week highs that you can consider for your buy watchlist.
DFI Retail Group (SGX: D01)
DFI Retail is a pan-Asian retailer that operates over 10,300 outlets comprising supermarkets, hypermarkets, convenience stores, and health and beauty shops, among others.
The group saw its share price hit a 52-week high of US$3.33 recently and is up 19.1% in a year.
DFI Retail issued an encouraging interim management statement for the third quarter of 2022 (3Q2022).
The group saw its underlying profitability improve in 3Q2022, buoyed by stronger like-for-like sales for health and beauty, convenience and its IKEA furniture businesses.
However, Grocery Retail division saw lower profitability as movement restrictions were eased, leading to a decrease in eating at home.
Weaker consumer sentiment also prevailed because of inflationary pressures.
Investors, however, are probably optimistic about China’s recent reopening.
The reopening will benefit DFI Retail’s convenience division, where South China was affected by COVID-related restrictions and lockdowns.
Banyan Tree Holdings (SGX: B58)
Banyan Tree is a multi-brand hospitality group that owns a diversified portfolio of hotels, resorts, spas, and residences across 10 global brands such as Angsana, Laguna, and Cassia.
The group’s share price recently touched a year-high of S$0.37 and is up 12.5% in one year.
Banyan Tree’s 3Q2022 business update saw an overall improvement in hotel operating metrics as air travel resumed and people started taking vacations again.
The group saw operating profit surge by 76% year on year for the quarter with hotel’s revenue per available room (RevPAR) soaring by 56% year on year.
Its hotel management fees segment also enjoyed a 30% year on year rise in fee income.
For 2022, the group saw seven new openings and conversions and anticipates that this number will hit 12 by the end of the last year.
Straco Corporation Limited (SGX: S85)
Straco is an owner and operator of tourism attraction.
Its main assets include Shanghai Ocean Aquarium (SOA) and Underwater World Xiamen (UWX) in China as well as the Singapore Flyer, a giant observation wheel.
Shares of Straco touched a 52-week high of S$0.515 and are up nearly 18% in the last year.
The group reported a downbeat set of earnings for 3Q2022 with revenue falling 14.2% year on year and net profit plunging 96% year on year to S$175 million.
The weak results were due to the disruptions in China caused by strict COVID-19 policies, offset by higher ridership on the Singapore Flyer.
Things are looking up for Straco with China’s reopening.
Visitor flow to both SOA and UWX should improve dramatically and lift the group’s revenue and profits, while Chinese tourists visiting Singapore will also boost ridership revenue for Straco’s Singapore Flyer asset.
Singapore Airlines Limited (SGX: C6L)
Singapore Airlines Limited, or SIA, is Singapore’s flagship airline.
The carrier has seen its share price scale a new 52-week high at S$6.02, and is up 19.4% in a year.
Passenger numbers for December 2022 were up more than four-fold from a year ago, reaching close to 2.7 million as the world’s borders have largely reopened.
SIA had already reported its highest-ever operating profit for the first half of fiscal 2023 (1H2023) and paid out an interim dividend of S$0.10.
China’s reopening is set to benefit the airline in 2023 as flights resume to the Middle Kingdom.
Singapore Tourism Board hopes to see traffic from China return to between 30% to 60% of pre-pandemic levels for this year, which will surely provide a strong boost for SIA’s financial numbers.
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Disclaimer: Royston Yang does not own shares of any of the companies mentioned.