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It’s a Wrap: The Top 3 and Bottom 3 Blue-Chip Stocks for August

The Straits Times Index (SGX: ^STI), which tracks the performance of the top 30 largest and most liquid companies listed in Singapore, ended August in the negative territory.

For the month, the index tumbled 3.2%, or around 106 points, to 3,213.5. Of the 30 index components, 21 were in the red while the remaining nine were in the green.

The top three winners of the Straits Times Index were Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6), Venture Corporation Ltd (SGX: V03) and CapitaLand Limited (SGX: C31).Source: S&P Global Market Intelligence

Yangzijiang reported a strong set of financial results for the second quarter ended 30 June 2018. As highlighted in my previous article here, revenue more than doubled to RMB 8.0 billion from RMB 3.8 billion a year ago while net profit climbed 38% to RMB 994.9 million.

The shipbuilder also announced last month that its wholly-owned subsidiary, Jiangsu Yangzijiang Shipbuilding, had acquired the remaining 40% of Huayuan Logistics for RMB119,299,520.

Huayuan Logistics is mainly involved in the leasing and chartering of vessels. Furthermore, it wholly-owns a cargo transportation company, Shanghai Huayuan Shipping. With the acquisition, both Huayuan Logistics and Shanghai Huayuan will become wholly-owned subsidiaries of Yangzijiang.

As for Venture’s latest financial results, revenue for the second quarter of 2018 declined by 6% to S$952.3 million, but net profit climbed 40.2% to S$97.9 million. It also announced an interim dividend of 20 cents per share for the quarter. Venture typically only pays a final dividend in the fourth quarter.

CapitaLand also reported its 2018 second-quarter earnings in August. Revenue for the quarter increased by 35.3% to S$1.34 billion while net profit went up by 4.4% to S$605.5 million. For more on the property outfit’s earnings, you can head here.

CapitaLand also announced last month that it had won the bid for two prime residential sites in Guangzhou, China, for RMB2.05 billion (around S$409.3 million). President and group chief executive of CapitaLand, Lim Ming Yan, gave some colour on the latest win:

“CapitaLand is pleased to win these two prime residential sites in Guangzhou, a first-tier Chinese city and the economic powerhouse of South China with strong fundamentals. This is our second acquisition in China in less than three months, as we gather momentum in replenishing our land bank. These 3,400 units in Guangzhou and Chongqing are a timely addition to our China residential pipeline, as we ready ourselves to release another 4,000 units for sale by the end of 2018. CapitaLand remains optimistic about the prospects of China’s residential market, where strong housing sales have continually contributed to the Group’s earnings.”

In another announcement, CapitaLand said that Lim Ming Yan would be stepping down as its president and group chief executive on 15 September 2018. He will be replaced by Lee Chee Koon, the chief investment officer of CapitaLand currently. Lim will continue to serve as a board director of the company until the end of this year.

In line with CapitaLand’s capital recycling efforts, the property developer is divesting its 70% interest in Westgate to CapitaLand Mall Trust (SGX: C38U) for S$789.6 million. The transaction is expected to be completed in the fourth quarter of 2018. As of 31 July 2018, Westgate had a committed occupancy of 98%.

On the other hand, the top three losers of the index were Thai Beverage Public Company Limited (SGX: Y92), Genting Singapore Ltd (SGX: G13) and Jardine Strategic Holdings Limited (SGX: J37).Source: S&P Global Market Intelligence (stock price for the Jardine Strategic has been converted to Singapore dollars from US dollars)

Thai Beverage had a poor third quarter of the fiscal year ending 30 September 2018. Even though its revenue climbed 34% year-on-year to THB 60.7 billion, Thai Beverage’s profit attributable to shareholders plunged by 61% to THB 6.0 billion. You can head here for a complete coverage of the beverage company’s earnings.

Genting’s revenue for the second quarter of 2018 tumbled 6% to S$560.3 million, but net profit increased by 3% to S$177.6 million. In the gaming segment, Genting’s VIP rolling volume showed year-on-year growth. However, revenue from that segment came down 8%.

Meanwhile, the non-gaming segment saw a revenue rise of 1%. Genting’s signature attractions at Resorts World Sentosa performed well for the quarter with average daily visitation exceeding 18,000. Hotels saw an average occupancy of more than 91%, higher than the industry average.

There was no material news on Jardine Strategic in August. In July, the conglomerate announced its earnings for the first half of 2018. Profit attributable to shareholders plunged 58% to US$984 million on the back of a 13% increase in revenue. Underlying net profit, which excludes non-trading items, grew 9%.

Sir Henry Keswick, Jardine Strategic’s chairman, said:

“After a good performance in the first half of 2018 driven primarily by Astra and Jardine Cycle & Carriage, we are optimistic for a stronger second half of the year, with these companies continuing to perform well and the contributions of other businesses expected to improve.”

The SPDR STI ETF (SGX: ES3), an exchange-traded fund which can be taken as a proxy for the Straits Times Index, was valued at a price-to-earnings ratio of 11.1 and had a distribution yield of 3.5% on 31 August 2018.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of CapitaLand Mall Trust. Motley Fool Singapore contributor Sudhan P owns units in CapitaLand Mall Trust.