Back during the tail end of 2020, there were news articles that highlighted how the Singapore Exchange (SGX) was Asia’s worst-performing market. Back then, overseas markets such as the U.S. were on a tear, and not surprisingly, many local investors started favoring overseas markets.
However, 2022 has seen a reversal of fortune. While overseas indexes such as the S&P 500 ( -12.29%), Nasdaq-100 (-19.45%) and Hang Seng Index (-13.32%) have declined, the Straits Times Index (STI) is up about 4.3% for the year thus far. This is impressive given how challenging the year has been thus far with events such as the Ukraine-Russia war, high energy prices leading to inflation and the spike in interest rates. Of course, the COVID-19 pandemic is still looming over our lives.
In a recent market update report by the SGX, Gerald Woon, founder and CEO of Beansprout, shared some notable earnings announcements that may have surprised the markets. In this week’s edition of 4 Stocks This Week, we take a look at 4 stocks that may have impressed the market with their financial results.
SIA (SGX: C6L)
If like me, you are one of those who have been visiting the Singapore Airlines (SIA) website regularly looking to get flights for your next family overseas trip(s), then it really shouldn’t come as a surprise to you that SIA has performed well over their last quarter.
On 28 July 2022, SIA (SGX: C6L) announced that it has made an operating profit of $556 million for 1Q2022/2023 (period from 1 April – 30 June 2022), the second highest quarterly operating profit in the SIA Group’s history. This is, despite inflationary pressures including high fuel prices, heightened geo-political risks and concerns about the global economic outlook that may pose challenges to the airline industry. Net profit is at $370 million.
You don’t need to be an investment expert to figure out what is the reason behind the good performance. Surging passenger demand for flights, as many of us can testify, has led to a 202% increase in revenue to $3.91 billion for the quarter, as compared to the $1.29 billion during the same period last year. SIA and Scoot carried 5.1 million passengers during the quarter – up 158.2% from the previous quarter and fourteen-fold high than a year before.
It’s worth noting that SIA’s quarterly revenue per available seat-kilometer was 10.2 cents, a record for the full-service airline. The Group also recorded an operating cash surplus of $1,480 million for the three months, a quarter-on-quarter improvement of $978 million.
SIA’s share price is currently trading at $5.41, up about 9% since the start of the year.
Wilmar (SGX: F34)
With a market capitalisation of about $26.8 billion, Wilmar (SGX: F34) is the fifth-largest company on the SGX and a Fortune 500 agribusiness company. It is involved in the entire value chain of the agricultural commodity business, from cultivation, to processing, to distribution of a wide range of edible food products and industrial agri-products.
Due to the Ukraine-Russia war driving up prices for products like animal feeds, fertilisers and other commodities that Wilmar is involved in, revenue and profits for 1H2022 have increased. Wilmar reported in record net profit of US$1.16 billion for 1H2022, up about 55.1% compared to the same period last year. Revenue for 1H2022 was at US$36.1 billion, about 22.3% higher compared to the same period last year. The company has also proposed an interim tax-exempt dividend of S$0.06 per share, the highest interim dividend since its listing.
Currently, Wilmar is trading at a price-to-earnings (PE) ratio of about 8.3 with a dividend yield of about 3.9%. It’s currently trading at $4.18, similar to where it was at the start of the year.
Sembcorp Industries (SGX: U96)
For the first half of 2022 (1H2022), Sembcorp Industries recorded a turnover of S$4.8 billion, up 45% from S$3.3 billion in 1H2021. Group net profit before exceptional items increased 94% to S$490 million, with higher contributions from the Renewables and Conventional Energy segments.
Net profit for the Renewables segment increased to S$76 million from S$24 million in 1H2021. The Conventional Energy segment posted a net profit of S$397 million, an increase of 115% from net profit before exceptional item of S$185 million in 1H2021. The higher contribution was mainly due to higher electricity prices in Singapore and India, as well as realised gains from favourable gas hedges entered into in 2021.
Sembcorp Industries is currently trading at $3.25, up about 62.5% from the start of the year. In view of the strong underlying performance, the board of directors announces an interim dividend of 4.0 cents per ordinary share, which will be paid on August 23, 2022.
Raffles Medical Group (SGX: BSL)
Raffles Medical (SGX: BSL) is an integrated healthcare provider, providing a wide range of healthcare services. While Raffles Medical’s business is largely in Singapore, it is present in approximately 14 cities in Singapore, China, Japan, Vietnam and Cambodia.
The company reported a profit of $59.7 million 1H22, a 51% rise compared to the previous year. According to the company, this increase in revenue to $382 million (up 11.2%) can be mainly attributed to contribution from COVID-19 related services as well as increases in patient numbers due to the opening up of Singapore’s economy and border to foreign patients seeking medical treatment in Singapore.
According to SGX data, Chairman Dr Loo Choo Yong also bought 300,000 ordinary shares of Raffles Medical Group last week on 2 August 2022 for $1.24 per share. The day before on 1 August 2022, he bought 53,800 ordinary shares at $1.18 per share. The company results announcement was made on the morning of 1 August 2022, before the commencement of trading.
Raffles Medical is currently trading at $1.30, down from the $1.37 that it was at the start of the year.
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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.