It was the change that everyone has been looking for.
I am talking about the relaxation of travel restrictions that will enable more travellers to enter Singapore come 1 April.
Previously, the vaccinated travel lane (VTL) framework meant that travellers from specific countries or regions were allowed into Singapore.
Under the arrangement, travellers were subject to a barrage of tests to ensure they remain infection-free.
Not anymore.
A new, simplified framework known as the vaccinated travel framework (VTF) will replace the VTLs tomorrow.
The VTF will allow all fully-vaccinated travellers, including children aged 12 and below, to enter Singapore with just one pre-departure test two days before departing for Singapore.
By expanding quarantine-free entry to more regions, Singapore can expect a raft of tourists in the coming months.
After two long years, Singapore’s airline, hospitality and tourism can finally breathe a sigh of relief.
Here are three stocks that will benefit greatly from this new travel framework.
Genting Singapore (SGX: G13)
Genting Singapore is the owner and operator of Resorts World Sentosa (RWS).
RWS is an integrated resort (IR) that features a casino, 1,600 hotel rooms, a Universal Studios theme park, and a variety of dining, retail, and entertainment outlets.
Shares of the IR operator have risen by more than 9% since the middle of March amid optimism on Singapore’s reopening.
The group had released a solid set of earnings for its fiscal 2021 (FY2021) ended 31 December 2021.
Revenue remained flat year on year at S$1.1 billion but operating profit nearly doubled to S$227.8 million on a lower cost of sales and operating expenses.
Subsequently, net profit soared from S$69.2 million a year ago to S$183.3 million.
A final dividend of S$0.01 per share was declared.
Genting Singapore should see business volumes improving from the influx of tourists coming into Singapore in the coming months.
The group is also embarking on an expansion plan and will invest S$400 million this year for “RWS 2.0”.
The expanded IR will have around 50% more gross floor area and more than 164,000 square metres of new attractions, entertainment, and lifestyle offerings.
No date was given for the completion of this entire upgrade, but the revamp of both Universal Studios and the Southeast Asian Aquarium should be completed by the end of 2024.
Singapore Airlines Limited (SGX: C6L)
Singapore Airlines Limited, or SIA, is Singapore’s national airline.
The group has seen its share price jump by nearly 13% from a low of S$4.87 in early March to its current S$5.50.
The news of the VTF and further reopening will no doubt be music to management’s ears as SIA can offer more flights to Singapore.
Investors should note that passenger numbers have already seen steady improvement in the last six months after the VTLs were launched.
Back in September last year, the number of passengers stood at just 159,700 but this has more than tripled to 544,600 in February this year.
SIA’s business update for its fiscal 2022’s third-quarter (3Q2022) also saw the airline turn in its first quarterly net profit of S$85 million since the start of the pandemic.
The group had projected that passenger capacity will increase to around half of pre-COVID levels by this month with around 70% of pre-COVID destinations active.
Its cargo division is also scaling new heights with revenue exceeding S$1 billion for the first time.
SATS Ltd (SGX: S58)
SATS is a provider of gateway services for a wide range of airlines and also provides food solutions for airlines, retailers, and institutions.
SATS’ share price has climbed nearly 14% to S$4.34 from early March.
The group saw revenue jump by 22.6% year on year to S$307.8 million for 3Q2022, led by an increase in business activities for both its Food Solutions and Gateway Services divisions.
For the first nine months of FY2022 (9M2022), SATS handled 39% more flights compared to a year ago and also served 75% more passengers.
Meals served jumped by 22% year on year to 39.3 million while cargo handled surged by nearly 56% year on year to 1.27 million tonnes.
The VTF should see more tourists coming into Singapore, thereby increasing the number of flights handled and passengers served.
Meanwhile, SATS also announced the development of a new SATS Food Hub by leasing a property from JTC Corporation.
The group will spend a total of S$150 million to develop this project which will serve as an open innovation platform to test new products and services.
Is now a good time to buy into Singapore REITs? After all, almost 50% of the 44 Singapore REITs were trading close to their 52-week lows in January.
But with the right strategy, mindset and stocks, REITs can still be a powerful source of dividends today and in the years ahead.
And in our upcoming (free) webinar, let us help you further. We’ll show you why REITs remain as one the best retirement assets, where to find resilient REITs that continue to grow and pay dividends, and how to tell if a REIT is worth a spot in your portfolio.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
