Singapore Market Focus - Seeking Growth At The Right Places, 10 Stocks To Watch Post 1H24 Earnings

Singapore Market Focus - DBS Research 2024-08-22: Seeking Growth At The Right Places, 10 Stocks To Watch Post 1H24 Earnings

SGinvestors.io

Published: 2024-09-05 01:26 PM

Yangzijiang (SGX:BS6) SINGAPORE TECH ENGINEERING LTD (SGX:S63)

Modest +0.2%/-0.5% revisions to overall FY24F/25F earnings are unlikely to move the Straits Times Index (STI)’s needle. We expect the STI to stay in rangebound trade over the next two months amid seasonal 3Q choppiness and uncertainty heading into the November US presidential election, with resistance of STI at 3377-3416 and support of STI at 3268.

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Conversely, technology saw the highest ratio of negative surprises on the back of slower-than-expected recovery. However, it is not a sector to be ruled out entirely. Even with the 6.9%/8.3% cuts to FY24F/25F earnings, the sector is still expected to lead earnings growth at 17.4% in FY25F.

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3 industrials themes that should feature favourably going forward –
1. Growth at a reasonable price. We like ComfortDelGro (SGX:C52) for its strong growth prospects this and next year, with EPS growth of 24% and 11%, respectively. Robust dividend yield of 5-6% is also seen as an attractive alternative to risk-free rates that are expected to fall in due time.
2. Buy-on-dips for resilient growth. Any meaningful sell-down in Yangzijiang Shipbuilding (SGX:BS6) and ST Engineering (SGX:S63) are opportunities to accumulate these resilient growth stocks, underpinned by their positive business momentum and record orderbooks.
3. Scope for more positive surprises. We believe there is more to SATS (SGX:S58) and its ability to positively surprise in the coming quarter(s), underpinned by solid business momentum and improvements in operating efficiency. The current FY25F EPS growth of 188% is amongst the highest under coverage.