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4 Singapore Stocks That Would Benefit As Singapore Reopens Its Borders To Travellers – SIA; SATS; Genting Singapore; Suntec REIT

With borders’ reopening, some of these stocks should see better days ahead.


Since the founding of Singapore in 1819 by Sir Stamford Raffles, Singapore has always been an island known and valued for its strategic location and accessibility. Even today, the Economic Development Board (EDB) describes Singapore as being “within a six-hour radius of any Southeast Asian County – that means we are an ideal hub from which you can access the region and its growing consumer market.”

Regularly ranked as the world’s best airport, Changi Airport serves more than 100 airlines flying to about 100 countries and territories globally. Before the pandemic, over 62 million passengers passed through the airport a year. Singapore is also linked to more than 600 ports globally, with 200 shipping lines passing through Singapore. Annually, more than 130,000 ships call at Singapore.

Due to the pandemic, however, the past two years have been challenging for Singapore and her businesses that rely on travellers and trades. On 24 March 2022 however, Prime Minister Lee Hsien Loong announced the government’s intent to make a “decisive step forward towards living with COVID-19.” These include relaxing safe distancing measures, and more importantly for businesses, easing up cross-border travel substantially.

From 1 April 2022, all fully vaccinated travellers from any country or region will be allowed to enter Singapore quarantine-free, provided they have not been in countries or regions on the Restricted list in the preceding seven days (Note: there is currently no country on the Restricted list). Also, fully vaccinated travellers can take any flight or ferry to Singapore to be accorded quarantine-free treatment upon arrival and will not be required to take an on-arrival test. You can find out more details on the reopening to vaccinated travel here.

Read Also: Winners And Losers Of The Easing Of Community Safe Management Measures (SMMs) And Border Measures

In this week’s edition of 4 Stocks This Week, we look at 4 SGX-listed companies that would benefit as Singapore reopens its borders to travellers.

Singapore Airlines (SIA) (SGX: C6L)

As global travel drastically slowed down due to the pandemic, one of the hardest-hit stocks in Singapore was SIA (SGX: C6L). For the financial year 2020/2021, SIA posted a $4.3 billion loss, with group revenue down 76.1% from $15.97 billion in FY2019/2020, to just $3.82 billion for FY2020/2021.

Now for some good news.

In its 3Q201/2022 results announcement released on 24 February 2022, SIA posts its first quarterly profit since the onset of the COVID-19 pandemic with a net profit of $85 million for the quarter. While it is still some way to go from their pre-pandemic earnings, it’s a good sign that the bleeding has finally stopped. Cash and bank balances are currently at $12.1 billion with debt balances at $14.9 billion.

With the simplification of border rules, SIA will likely benefit as vaccinated travelers will find it easier to travel by air into Singapore. SIA’s share price went up 5.8% this week and its shares are currently trading at $5.46, with its current 52-week high at $5.78.

SATS (SGX: S58)

Similar to SIA, SATS (SGX: S58) would benefit from a reopening of Singapore’s border. While SIA transports people overseas, SATS provides the food and beverages we consume when we go on these flights. SATS also provides gateway passenger and security services for the airport. So an increase in flights and passengers into Changi Airport will bode well for them, regardless of whether it’s an SIA flight or from other airlines.

Similar to SIA, SATS did not fare well for FY2020/2021. Group revenue was down about 50% to $970 million, while losses were at $78.9 million, after considering government grants.

Things are looking up, however.

In its 3Q2021/2022 business update on 23 February 2022, SATS saw a profit attributable to owners of the company (PATMI) of $5.1 million, inclusive of government relief (without government reliefs, 3Q PATMI would be a loss of $33.0 million). In line with the overall air travel recovery, revenue for the 9M2021/2022 is up about 26.9% compared to the same period in the year before. PATMI for 9M2021/2022 is up to $18.3 million, an improvement of $98.0 million compared to the net loss of $79.7 million in the same period last year. At this rate, the company would likely be profitable (inclusive of government grant) for FY2021/2022.

SATS’s share price is up about 6.5% in the past 5 days and its shares are currently trading at $4.24, near its 52-week high of 4.46. Pre-pandemic, the share price was trading at about $5.

Genting Singapore (SGX: G13)

Not to be confused with Genting Hong Kong that is currently in liquidation and which (used to) trades on the Hong Kong Exchange, Genting Singapore (SGX: G13) is the company that owns Resort World Sentosa in Singapore. It does not own Dream Cruise, which is owned and operated by Genting Hong Kong.

For the Financial Year ending December 2020, Genting Singapore’s revenue was down about 57% to $1.06 billion, net profit for the year was at $69 million, compared to $688 million the year before.

In comparison, net profit for the Financial Year ending December 2021 was at $183 million even though revenue stayed flat at $1.07 billion. This was due largely to a reduction in the cost of sales, which went down to $740 million in 2021 from $831 million in 2020.

Naturally, the opening of borders would mean more overseas travellers visiting Singapore and that bodes well for Resort World Sentosa that is owned by Genting Singapore. The company share price went up about 5% this week to $0.82. Prior to the pandemic, the share price was usually trading at about the $0.90 to $1.0 range. It’s 52-week high is currently at $0.9T4.

Suntec REIT (SGX: T82U)

Suntec REIT (SGX: T82U), as you would know by its name, own Suntec City. Besides that, however, the company also owns One Raffles Quay and some of the MBFC properties. They also have a portfolio of properties in Australia and the United Kingdom. In total, Suntec REIT has $11.5 billion of assets under its management across the office, retail, and convention space.

In its FY2021 results announcement on 26 January 2022, the company reported a distribution per unit (DPU) of 8.66 cents for FY2021, up about 17.1% compared to the year before. Distribution income from operations increased by 21.6% to $129 million. The good results have also led to Suntec REIT being one of the best performing S-REITs in Singapore thus far in 2022, with a return of about 11.4%.

With borders reopening, we can expect more MICE events to be taking place in Singapore, and that would be positive for Suntec REIT. Also, as people return to the office, this will also bolster the demand for office space which would be positive news for Suntec REIT.

Suntec REIT’s share price went up about 3% this week and its shares are now trading at $1.75, a 52-week high.

Read Also: REITs Report Card 2022: How Singapore REITs Performed in 1st Quarter 2022

Photo by shawnanggg on Unsplash

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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.