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Investors should remember that inventory costs in the end depend on the accumulation of profits and money generated by a company.
So, if you’re looking for steady capital appreciation, look for corporations that can steadily increase their profits and cash flow.
The advantage is that with higher trading returns, those corporations will also pay higher dividends, allowing you to take advantage of a larger passive source of income stream.
Top-tier corporations are a smart position to start looking for investment ideas, as they have a longer track record of functionality and are reputable names in their respective industries.
Here are four blue-chip stocks that look poised to report higher earnings for 2024.
Genting Singapore is the operator of Resorts World Sentosa (RWS) Integrated Resort (IR).
RWS is spread over 49 hectares and attractions such as Universal Studios Singapore (USS), a casino, 8 luxury hotels, and a variety of dining and entertainment options.
For its third quarter 2023 (Q3 2023) point of business, Genting Singapore recorded a 33% year-on-year increase in overall profit to S$689. 9 million, due to the sustained recovery in tourism.
Net profit for the third quarter of 2023 increased by 59% year-on-year to S$216. 3 million.
When it announced its half-year results, the IR operator’s profit more than tripled year-on-year to S$276. 7 million, and the interim dividend increased by 50% year-on-year to S$0. 015.
There may be more to come from the group.
The Tourism Board of Singapore forecasts that the tourism sector is expected to return to pre-pandemic levels through 2024, after reporting 6. 3 million visitors in 2022.
At Singapore Airlines Limited (SGX: C6L), capacity is expected to reach 92% of pre-pandemic levels by December 2023.
The airline aims to return to pre-COVID-19 capacity in 2024.
These symptoms point to an increase in tourism next year, which will benefit Genting Singapore and put it in a position to report higher profits.
Singapore Technologies Engineering, or STE, is a technology, engineering, and defense organization serving consumers in the aerospace, urban, defense, and public protection industries.
In its third quarter 2023 (Q3 2023) business update, STE recorded a year-on-year profit increase of 9% to S$2. 4 billion.
During the first nine months of 2023 (9 months of 2023), the engineering conglomerate recorded a profit increase in all three segments.
The organization has been awarded contracts worth S$11. 7 billion for the nine months of 2023, with just over a portion of the contracts won going to the defense and public protection segment.
As of September 30, 2023, STE’s order book stood at S$27. 5 billion, of which S$2. 5 billion will be delivered by the end of 2023.
This means the organization still has $25 billion in contracts to recognize as earnings in 2024 and beyond.
STE has also undertaken capacity expansion projects to position the organization for further growth, such as the acquisition of a brownfield at Gul Yard for its shipping and repair business and investment in airframe maintenance hangars at Changi for its maintenance, repair and overhaul activities.
Investors are also keeping in mind that STE’s acquisition of TransCore is also expected to help boost earnings by 2024.
Keppel is an asset manager with 3 divisions: infrastructure, real estate and connectivity.
For the full nine months of 2023, Keppel reported higher year-over-year earnings and gains, driven by increased functionality in the Infrastructure and Connectivity segments.
The organization also saw increased activity on its investment and fund control platforms.
Total acquisitions of about S$1. 7 billion were completed in the first nine months of 2023 and are expected to contribute to Keppel’s earnings and effects next year.
The organization has also recorded a cumulative asset monetization of S$5. 3 billion since October 2020, which will allow the asset manager to recycle its budget into higher-performing and better-performing assets.
Keppel is advancing its asset reduction strategy for urban responses by leveraging local partners in China to invest in projects there.
Finally, the organization is also trying to control its budget to take advantage of recurring asset control fees.
This payment amounts to S$178 million for the nine months of 2023.
Yangzijiang Shipbuilding, or YZJ, is one of China’s privately owned shipbuilders.
The organization benefited from strong order intake momentum and recorded $6. 5 billion in orders in the first nine months of 2023, more than double its target.
The organization is on track to reach its goal of 57 vessels, of which 42 have already been delivered in the nine months of 2023.
YZJ reported a record order book of $14. 8 billion as of September 30, 2023.
The shipping industry is pushing to accelerate fleet decarbonization, which is expected to speed up the fleet replacement cycle for YZJ customers, giving it more opportunities to win contracts in 2024.
Its growing order book is also expected to translate into particularly higher earnings and profits next year.
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Disclosure: Royston Yang owns stock in any of the above corporations.
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