What happened?
It seems like the blink of an eye as the first half of 2024 whizzed by.
The higher interest rate environment, along with the uncertain macroeconomic backdrop, has been a bane for numerous businesses.
Despite these challenges, the Singapore market managed to produce several winning blue-chip stocks.
Earlier, we shared 4 blue chip stocks that managed to report higher profits in the first quarter of 2024.
In this article, we look at 5 of the best-performing Singapore blue chip stocks in the first half of this year (1H 2024).
The share prices of Yangzijiang Shipbuilding, DBS, Singtel, OCBC and ST Engineering posted a double-digit percentage gain, exceeding the 3% gain for the Straits Times Index (STI) over the same period.
We review these stocks to determine if they can continue their impressive performance for the latter half of the year.
Here are the five top-performing Singapore blue-chip stocks
#1 – Yangzijiang Shipbuilding Holdings
Yangzijiang Shipbuilding counts itself as one of the largest private shipbuilding companies in China.
The group owns four shipyards in Jiangsu province that are capable of producing a broad range of commercial vessels such as containerships, bulk carriers, and LNG carriers.
Yangzijiang Shipbuilding is the clear winner among the blue-chip companies with an more than 60% increase in its share price for 1H 2024.
The shipbuilder reported a stellar set of earnings for 2023 with revenue rising 16.5% year on year to RMB 24.1 billion.
Net profit leapt 57% year on year to a record high of RMB 4.1 billion, and the group paid out a final dividend of S$0.065, 30% higher than the S$0.05 paid out in 2022.
For the first quarter of 2024 (1Q 2024), Yangzijiang Shipbuilding announced that it had secured US$3.32 billion of orders year-to-date, fulfilling 74% of its target for the year.
The shipbuilder’s order book stood at a record US$16.08 billion and the group is also on track to hit its 2024 delivery target.
Industry demand for new vessels remains strong (see diagram below).
Containerships should see demand growth of 9.5% this year while LNG and LPG carriers should see healthy compound annual growth rates (CAGR) of 3.6% and 5.5%, respectively, from now till 2029.
Find out how much dividends you would have received as a shareholder of Yangzijiang Shipbuilding in the past 12 months with the calculator below.
Related links:
- Weekly Review with SIAS: Yangzijiang Shipbuilding, hospitality stocks in focus
- Yangzijiang Shipbuilding share price and analysis
- Yangzijiang Shipbuilding dividend history
#2 – DBS Group
DBS is Singapore’s largest bank by market capitalisation and its 1H 2024 performance puts it in second place among the blue-chip names.
Shares of DBS were up 19.4% in 1H 2024 to hit its all-time high of S$36.12, but the lender’s shares have since gone on to break a new record at S$37.
There are ample reasons for investors’ optimism.
DBS reported a 15% year-on-year increase in net profit to S$2.96 billion, a record, on the back of a 13% year-on-year jump in total income to S$5.56 billion.
The bank also saw its annualised return on equity (ROE) achieve a new high of 19.4% for the quarter.
A quarterly dividend of S$0.54 was declared, a sharp 42% year on year increase from 1Q 2023.
During DBS’s recent annual general meeting, CEO Piyush Gupta illustrated the structural improvements have driven the bank’s record ROE.
He also did not rule out the potential for DBS to return more capital to shareholders via special dividends or share buybacks.
The lender has excess capital of S$2.00 per share and DBS has indicated that it will pay at least S$2.16 per share for FY24.
Find out how much dividends you would have received as a shareholder of DBS Group in the past 12 months with the calculator below.
Related links:
- Beansprout Insight: DBS soars to all-time high. Still worth buying at 6.1% dividend yield?
- DBS Group share price and analysis
- DBS Group dividend history
#3 – Singapore Telecommunications Ltd (Singtel)
Singtel is up next with a share price gain of 12.2% for 1H 2024.
Singapore’s largest telco reported a robust set of earnings for its fiscal 2024 (FY2024) ending 31 March 2024.
Although net profit was reported as S$795 million or a 64% year-on-year fall, this was because of non-cash impairment charges on Optus Enterprise fixed network assets.
Excluding this item, Singtel’s underlying net profit would have risen by 10% year on year to S$2.26 billion.
The telco also revised its core dividend policy upwards with a payout range between 70% to 90% of underlying net profit, up from 60% to 80% previously.
In addition, management has introduced a new value realisation dividend (VRD) of between S$0.03 to S$0.06 annually that will be funded from excess capital.
This VRD will be embedded into Singtel’s future dividend policy and not be just a one-off declaration.
There could be more to come from Singtel as management unveiled its new ST28 long-term strategy.
The group has laid out areas for improvement and will look to optimise its core business and implement smart capital management to realise value from its existing assets.
Its goal is to create sustained value for shareholders with rising profits and increasing dividends in the years to come.
Find out how much dividends you would have received as a shareholder of Singapore Telecommunications Ltd (Singtel) in the past 12 months with the calculator below.
Related links:
- kopi-C with Singtel’s Group CFO: ‘We impact the lives of more than 700 million people’
- Singapore Telecommunications Ltd (Singtel) share price and analysis
- Singapore Telecommunications Ltd (Singtel) dividend history
#4 – OCBC
Singapore’s second-largest bank OCBC comes in at fourth place with a 1H 2024 share price increase of 11.7%.
Like DBS, OCBC also reported a sterling set of earnings as higher interest rates boosted the bank’s net interest income.
Total income rose 8% year on year to S$3.6 billion with net interest margin coming in at 2.27%.
Net profit inched up 5% year on year to a record S$1.98 billion for the quarter.
Looking ahead, OCBC announced a voluntary unconditional general offer for an 11.56% stake in Great Eastern Holdings that it does not own.
If successful, this acquisition will add to OCBC’s net profit and increase its ROE.
CEO Helen Wong is confident of delivering on the bank’s strategic initiatives for 2024 and expects low single-digit loan growth for the year.
Meanwhile, OCBC intends to invest HK$1.5 billion to grow in Greater China.
This money will be used to upgrade its technology and facilities in the region and the bank will hire around 300 new staff over the next three years to expand its regional engineering hub.
Its private banking subsidiary, Bank of Singapore, is targeting to achieve a 50% growth in its assets under management by 2026.
OCBC’s higher profit will allow room for higher dividend per share if it adheres to a payout ratio of 50% or above.
Find out how much dividends you would have received as a shareholder of OCBC in the past 12 months with the calculator below.
Related links:
- Beansprout Insight: OCBC offers to privatise Great Eastern. What should shareholders do?
- DBS rises more than UOB and OCBC after record profit. Still a better buy?
- OCBC share price and analysis
- OCBC dividend history
#5 – Singapore Technologies Engineering (ST Engineering)
Coming in at fifth place is ST Engineering with a share price gain of 11.3% for 1H 2024.
The engineering giant reported a healthy 12% year-on-year increase in revenue for 1Q 2024 to S$2.7 billion.
In particular, its Commercial Aerospace segment saw a 32% year on year jump in revenue to S$1.15 billion.
ST Engineering reported contract wins amounting to S$3 billion for 1Q 2024, taking its order book to S$27.7 billion as of 31 March 2024.
An interim dividend of S$0.04 was declared, unchanged from a year ago.
Find out how much dividends you would have received as a shareholder of Singapore Technologies Engineering (ST Engineering) in the past 12 months with the calculator below.
Related links:
- ST Engineering, CICT in focus: Weekly Review with SIAS
- Singapore Technologies Engineering (ST Engineering) share price and analysis
- Singapore Technologies Engineering (ST Engineering) dividend history
What would Beansprout do?
These five companies are seeing their business perform well which justifies the strong performance of their share price.
Looking ahead, some of these blue chip stocks continue to have decent prospects.
Across the five names, there is most significant upside to consensus share price target for Singtel. Analysts have an average target price of S$3.15 as of 5th July, representing a potential upside of 10% from its current share price.
On the other hand, analysts see less upside to Yangzijiang Shipbuilding’s share price after its spectacular share price rally, with the consensus share price target of S$2.48 representing just a potential 3% upside from its current share price.
For investors looking for dividends, DBS offers the highest dividend yield amongst the five names, with a dividend yield of 5.7% as of 5th July.
On the other hand, ST Engineering’s current dividend yield of 3.7% is now below its historical average. Likewise, Yangzijiang Shipbuilding’s dividend yield of 2.7% is also below its historical average.
To learn more about the prospects of DBS and OCBC, read our analysis on the prospects of Singapore banks after their first quarter results.
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