5 Singaporean stocks of flagship companies: will they recover after a 20% drop?

One good way to find suitable investment opportunities is to look in the sale section. Due to various factors such as macroeconomics, fundamental business indicators, and market sentiment, the stock prices of some companies may be lowered without any significant reason. The key here is to find reliable companies that have been unfairly punished. Stocks of solid companies can provide peace of mind. Their reputation and long-term experience also mean that they have weathered both good times and bad. Here are five stocks of solid companies whose prices have fallen by 20% or more. We will take a closer look at each of them to determine if they can recover by 2024.

Hongkong Land (SGX: H78)

Hongkong Land, or HKL, is a group focused on investment, management, and development of real estate. The group owns and manages over 850,000 square meters of premium office and retail space in Hong Kong, Singapore, Beijing, and Jakarta. The price of HKL shares has decreased by 30.6% this year to $3.22. The real estate giant published its latest interim report for the third quarter of 2023 (3Q 2023). The total net profit for 3Q 2023 was lower compared to the previous year due to a decrease in contributions from ongoing projects due to delays in the scheduled completion of sales. In Hong Kong, HKL's office portfolio had a vacancy rate (based on commitments) of 6.8%, compared to 6.2% at the end of June. Rental rates remained negative, and demand for rentals remained weak due to rising interest rates affecting office demand. In Singapore, there has been a positive change in office rental rates, and physical vacancy remains low at 2.1% as of September 30, 2023. HKL expects that net profit in 2023 will be moderately lower than in 2022 due to a shift in the timing of revenue recognition from the sale of residential properties in the West Bank of Shanghai, as well as a decline in residential property values in Wuhan.

Thai Beverage (SGX: Y92)

Thai Beverage is a leading company in the food and beverage sector with four main divisions: spirits, beer, non-alcoholic beverages, and food products. The group has an extensive distribution network with over 400,000 points of sale in Thailand. The share price of Thai Beverage has decreased by about 28% this year to 0.49 Singapore dollars. The group announced mixed results for the financial year 2023 (FY2023), which ended on September 30. Revenue increased by 2% compared to the previous year, reaching 279.1 billion baht, but operating profit fell by 9% to 32.9 billion baht. Net profit also decreased by 9% to 27.4 billion baht.

Venture Corporation Ltd (SGX: V03)

Venture Corporation is a provider of technology products, services, and solutions for clients in industries such as life sciences, genomics, medical devices, networks, and communications. Shares of this technology group have dropped by 26.6% this year to a level of 12.53 Singapore dollars. Venture continues to feel the impact of the semiconductor downturn on its financial performance. For the first nine months of 2023, revenue decreased by 18.8% compared to the previous year, totaling 2.3 billion Singapore dollars. Net profit fell by 25.2% to 203.3 million Singapore dollars. Despite the decline in profits, Venture maintains a strong net cash position of 956 million Singapore dollars as of September 30, 2023. Despite the downturn, the group intends to increase its involvement in new promising areas of technology to provide greater value for shareholders.

City Developments Limited (SGX: C09)

City Developments Limited, or CDL, is a global real estate company operating in 143 locations across 28 countries and regions. CDL's stock price has decreased by 23.3% this year, settling at SGD 6.26. In its 3Q 2023 performance review, CDL reported property sales in Singapore totaling 183 units for a total of SGD 325 million. The company also sold its existing inventory, with four projects sold at over 90% completion. The group acquired a plot of land measuring 155,351 square feet for SGD 294.9 million to replenish its land bank and plans to launch development there in the second half of 2024, with around 350 residential units. During the quarter, CDL initiated the process of creating a new city center at a cost of approximately SGD 50 million. The renovation, scheduled for completion in 2025, will enhance the customer experience and revitalize the mix of tenants.

DFI Retail Group (SGX: D01)

DFI Retail Group is a pan-Asian retailer with over 10,700 points of sale in 13 countries and territories, employing around 218,000 staff. The group's stock price has dropped by 22.4% this year, settling at $2.22. In the DFI Retail Group's operational update for Q3 2023, the underlying profit increased by more than 80% compared to the previous year. The North Asian food business showed sales and profitability in line with the previous year, but food sales in Southeast Asia remained weak due to intense competition and reduced consumer sentiment caused by inflation. However, the Convenience Store division reported increased profitability in Q3 2023 compared to the previous year. The Health and Beauty segment also showed improved profitability, with double-digit sales growth at Mannings due to an increase in tourist numbers and market share.

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