Singapore Equity Picks
- • TWRR since inception slipped slightly to +142.4%, but still near record high
- • Portfolio’s 1-year TWRR of 5.6% outperforms the STI’s 0.5% return
As of 16 May 2023
Key facts
|
Inception Date |
22 Jul 2016 |
TWRR (%) |
142.39% |
|
Start Value (S$) |
121,000 |
TWRR Ann (%) |
13.88% |
|
Current Value ($) |
293,068 |
Total Dividends Received ($) |
26,314 |
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Current DBS Equity Picks
As of 23 May 2023
- TWRR since inception slipped slightly to +142.4%, but still near record high
- Portfolio’s 1-year TWRR of 5.6% outperforms the STI’s 0.5% return
- 16 May 2023 - ComfortDelgro : Remove from Blue Chips category @ $1.18
- 18 May 2023 - Hutchison Port Trust (HPT Trust): Remove from Dividend at $0.187
- 19 May 2023 - DFI Retail Group (DFI) Holdings: Raise exposure by 1,500 shares @ $2.80
- 23 May 2023 - SPDR STI ETF: Add 5,500 shares @ $3.272 to Blue Chips
- 23 May 2023 - Far East Hospitality Trust: Add 30,000 shares @ $0.605 to Dividend
BLUE CHIP: Provides steady growth over a longer time period
DIVIDEND: Provides steady income stream
GROWTH: Provides capital growth over 12 month
The STI’s 2.9% decline since our last review (14 Apr) is in line with our view of a market consolidation heading into May. We were net sellers over the past month. Our active portfolio management and stock-picking efforts have allowed the portfolio to deliver a one-year TWRR of 5.6%, outperforming the STI’s 0.5% return.
We added Keppel Corp as an undervalued, global asset manager play. Improved earnings quality, rising investment into green solutions, and plans to quadruple asset management AUM to S$200bn by 2030 are reasons we like this stock.
We made two REIT rotations within the retail and hospitality sub-segments. We replaced Fraser Centrepoint Trust (lower forward yields of 5.2% with limited near-term upside) with LendLease REIT, which offers a more attractive FY23F yield of 7.2%. Moreover, we see the 313@Somerset and JEM assets as beneficiaries of (i) returning tourists and (ii) robust retail sales in Singapore.
We also initiated a position in CDL Hospitality, in place of CapitaLand Ascott. Both are beneficiaries of elevated RevPAR and robust travel demand recovery, though the latter’s near-term share price could be affected by CLI’s distribution in specie.
We pre-emptively removed ThaiBev ahead of its first-half results, referencing Sabeco’s weaker-than-expected performance. UMS Holdings was also removed following our analyst’s earnings and target price downgrade, coupled with the expectation of a weaker 2Q23. We sold CapitaLand India on the back of its lacklustre share price performance upon inclusion.
23 May 2023 - SPDR STI ETF: Add 5,500 shares @ $3.272 to Blue Chips
We utilize part of the available cash to protect the Singapore Equity Picks’ >6% YTD outperformance vs the benchmark STI. STI’s decline MTD has brought the index down to 3,180 near-term support that coincided with 10.8x (-2SD) 12-mth fwd PE, which is within our expectations. Sentiment was impacted by concerns about further slowing of the manufacturing sector and the current US debt ceiling impasse. We take a view, but will continue to monitor and react, if necessary, that the latter can be resolved in time for the US to avoid a default, as in past instances.
23 May 2023 - Far East Hospitality Trust: Add 30,000 shares @ $0.605 to Dividend
FEHT is a pure Singapore hospitality REIT that benefits most from the continued recovery in Singapore tourist arrivals. Eight out of FEHT’s nine hotel assets met the variable rent threshold in 1Q23, with good traction on both group bookings and corporate bookings. Gearing is the lowest among hospitality REITs at 32.0%, with cost of debt at 3.2%. FEHT had successfully refinanced 2023 debt maturities last year and a portion of FY24 debt maturities. There’s little to no risk of equity fund raising this year. Stock trades at 5.75% FY23F yield, 0.7X P/NAV. Stock price looks well supported at $0.595, suggesting favorable risk-reward ratio towards our fundamental TP of $0.74.
19 May 2023 - DFI Retail Group (DFI) Holdings: Raise exposure by 1,500 shares @ $2.78
We have raised our holdings by 1,500 shares following DFI’s 1Q business update that was in line with expectations and points to a positive outlook. This allays concern that consumer spending may be weaker-than-expected despite China’s reopening. We take opportunity of the stock’s recent pullback to raise our exposure. With this increase, we now have 6,300 DFI shares under Singapore Equity Picks.
18 May 2023 - Hutchison Port Trust (HPT Trust): Remove from Dividend at $0.187
We remove the stock observing the weak YTD container throughput data for its peer that could spell the same outcome for HPHT, despite China’s reopening. Peer’s overall throughput at Pearl River Delta region (Yantian, Guangzhou and Hong Kong terminals) is down -10.3% YTD (y-o-y). This weak number appears to track China’s manufacturing PMI that slipped back to contraction in April. With global trade recovery likely to be uncertain in 2Q23, we think HPHT’s stock price may stay muted over the next 2 months heading to its interim results. Stock price action over the past 2 months has formed a descending triangle pattern that looks at risk of cracking below $0.187 immediate support.
16 May 2023 - ComfortDelgro : Remove from Blue Chips category @ $1.18
While there is cautious optimism that ComfortDelgro (CD)’s recovering pace can pick up in coming quarters, we remove the stock following its weaker-than-expected 1Q23 business update and lacklustre stock price performance. Our remaining amalgamated CD shares returned -7.8% (cum dividend).
Please note the information below was accurate as of 16 May 2023.
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