Earnings season is rolling around once again.
This round marks the last results reporting season for 2023 as companies cap off a year of headwinds marked by high inflation and surging interest rates.
Despite these challenges, some businesses have bucked the trend by posting encouraging results.
For investors who are looking for stability along with dividends, they can turn to the crop of reliable blue-chip stocks.
We scoured through these businesses and identified four that may be poised to report better profits.
DBS Group (SGX: D05)
DBS, as Singapore’s largest bank by market capitalisation, needs no introduction.
The lender is riding high on the wave of interest rate increases by the US Federal Reserve.
For the first half of 2023 (1H 2023), DBS reported a sparkling set of earnings that saw net profit hit a record high of S$5.2 billion.
The bank also hiked its quarterly dividend by 33% year on year to S$0.48.
Moving forward, investors can look forward to several catalysts for the blue-chip bank.
CEO Piyush Gupta expects fee income to continue growing in 2H 2023 for a mid-single-digit year on year increase for the full year.
He also believes there is an upside for the bank’s net interest margin (NIM) as one-fifth of its loan book has yet to be repriced to account for higher rates.
Meanwhile, officials at the US central bank also believe that interest rates will need to stay elevated until policymakers are convinced that inflation is heading down to the 2% level.
One more rate hike could also be on the cards for the remainder of this year.
DBS’s CEO also sees good opportunities to expand in both China and India and intends to boost the bank’s presence in these countries.
Investors could also see more upside for the lender as it integrates its acquisition of Citigroup’s (NYSE: C) Taiwan consumer banking business.
Singapore Airlines Limited (SGX: C6L)
Singapore Airlines Limited, or SIA, is Singapore’s flagship airline.
The carrier is capitalising on the surge in pent-up demand for air travel as restrictions are lifted in many countries.
The group reported a sterling set of results for its fiscal 2024’s first quarter (1Q FY2024) as net profit nearly doubled year-on-year to S$734 million.
There could be more to come as SIA increases its fleet and network to cope with the higher loads.
Management reports that near-term forward passenger bookings remain robust and the airline will also resume flights to destinations such as Busan (South Korea) and Nanchang (China) and increase flights to Bengaluru and Chennai in India.
Air travel between Singapore and China is projected to mount a strong recovery.
However, it may take time for passenger volume to ramp up to pre-pandemic levels even as the number of Chinese tourists crossed the half-million mark in August for the first time since the pandemic broke out.
Singapore Tourism Board is also doing its part to boost tourism as it unveiled its latest global campaign “Made in Singapore” late last month.
Showcasing iconic attractions along with hidden gems, this campaign promises to further increase Singapore’s attractiveness as a travel destination and draw more tourists to the island.
Yangzijiang Shipbuilding Holdings (SGX: BS6)
Yangzijiang Shipbuilding, or YZJ, is one of the largest non-state-owned shipbuilding companies in China.
The group owns four shipyards in Jiangsu province that can manufacture a broad range of commercial vessels such as bulk carriers, large containerships, and LNG carriers.
The shipbuilder turned in a robust performance for 1H 2023 with revenue increasing 16% year on year to RMB 11.3 billion.
Net profit soared 47% year on year to RMB 1.7 billion.
The group has slowly but steadily transformed its orderbook to focus on greener and cleaner vessel types.
As of 30 June 2023, its order book comprised 181 vessels with a total contract value of US$14.7 billion to be delivered between 2023 to 2028.
Clean energy vessel orders make up 56% of YZJ’s total orderbook compared to just 23% a year ago.
The group has seen a sharp increase in its orderbook over the past two and a half years with a more than quadruple increase from just US$3.1 billion as of 31 December 2020.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is a global engineering and technology group catering to the smart city, aerospace, and defence industries.
Like YZJ, STE has also seen its order book hit a recent high of S$27.7 billion as of 30 June 2023, up 20% from 31 December 2022.
In 1H 2023, the engineering giant snagged around S$9.5 billion in new contracts.
The group also reported a strong set of earnings for 1H 2023 with revenue jumping 19% year on year to S$4.9 billion.
Net profit after adjusting for one-off and exceptional items climbed 26% year on year to S$300 million.
Looking at STE’s burgeoning order book, investors can expect the engineering group to report steadily better results in the quarters ahead.
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Disclosure: Royston Yang owns shares of DBS Group.
