Royston Yang: Boustead Singapore
With the release of its recent FY 2019 earnings, Boustead Singapore Limited (SGX: F9D) has demonstrated resilience in its three core divisions of energy-related engineering, real estate solutions, and geo-spatial technology. The group has a large cash reserve and strong balance sheet for potential acquisitions. It’s also maintaining its full-year dividend of 3 Singapore cents per share (sporting a dividend yield of 3.75%).
The group is deploying capital to fund strategic growth programmes, which in time will boost the businesses under its various divisions and underpin long-term performance. Healthcare Technology, its newly-acquired division back in June 2018, is starting to contribute to top and bottom line, albeit small. Management is prudent and competent and I am confident that they can steer the group to better years ahead.
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Royston Yang owns shares in Boustead Singapore Limited.
Sudhan P: Raffles Medical Group
Private healthcare provider, Raffles Medical Group Ltd (SGX: BSL), would be my top stock for June. In its latest quarterly earnings, revenue grew 6.7% year-on-year to S$128.3 million, but net profit after tax fell 13.7% to S$13.6 million due to start-up costs for Raffles Hospital Chongqing. Excluding the hospital in China, net profit after tax would have risen 2.1% year-on-year. So, it was a stable set of results from Raffles Medical.
The healthcare outfit is planting its seeds to capture growth from China’s healthcare sector. Raffles Medical is expected to open another hospital in China (Shanghai) in the second half of 2019. This is on top of growing its services in Singapore through the extension of its flagship Raffles Hospital. Its current price-to-earnings ratio of 27, at its share price of S$1.04, seems to be a reasonable price to pay given a stable business combined with growth potential.
Sudhan P owns shares in Raffles Medical Group.
Lawrence Nga: Hongkong Land
I think Hongkong Land Holdings Limited (SGX: H78) is trading at a relatively cheap valuation at the moment, given its low price-to-book and price-to-earnings ratios of 0.41 and 6.44, respectively.
In the last decade, it has grown its book value from US$5.67 in 2009 to US$15.98 in 2018. This translates to a 12.2% compound annual growth rate (CAGR). If it can continue to grow at such a rate, inclusive of its dividend yield (3.3% presently), investors should be expecting double-digit returns in the near future. Also, there’s the potential for growth in valuation. Going forward, Hongkong Land’s exposure to emerging markets – like China and Southeast Asia – position it well for long-term growth.
Lawrence Nga doesn’t own shares in Hongkong Land
Tim Phillips: Frasers Commercial Trust
I’m going to go for commercial REIT Frasers Commercial Trust (SGX: ND8U). Backed by a strong sponsor, it owns six properties in total (three in Australia, two in Singapore and one in the UK) and gives investors here a bit more international exposure/diversification as just over half of its revenue comes from the Australian properties. What’s more, despite low occupancy at Alexandra Technopark, through prudent capital management and acquisitions – including a UK business park – it has managed to keep its quarterly distribution per unit (DPU) stable at 2.4 Singapore cents. That means it’s yielding 6.4% at its latest price of S$1.50 per unit.
There’s also the REIT’s low gearing of 29.1% as of 31 March 2019, well below the regulatory ceiling of 45%, giving it ample room for further acquisitions. Ongoing Asset Enhancement Initiatives (AEIs) at China Square Central as well as Alexandra Technopark should also boost occupancy, and potentially the DPU, in the near future. Finally, being a dividend investor, I love the fact that it offers scrip dividends as a payout option, something not all REITs here offer.
Tim Phillips owns shares in Frasers Commercial Trust.
Jeremy Chia: Sasseur REIT
Mall owner Sasseur REIT (SGX: CRPU) released another impressive set of results for the first three months of 2019, with distribution per unit coming in 9.6% higher than its IPO forecast. The growing demand for discounted branded goods in China continues to provide significant tailwinds for Sasseur REIT. In addition, the REIT’s rental income will continue to rise as the malls in its portfolio mature and attract higher footfall.
With the REIT’s relatively low gearing and right-of-first-refusal properties, there could also potentially be a debt-funded acquisition that could boost growth in the future. But perhaps the most appealing aspect of Sasseur REIT right now is its low valuation. At the time of writing, Sasseur REIT trades at S$0.78 per unit. This translates to a meaty yield of more than 8%, making it one of the most attractively-priced REITs in the market.
Jeremy Chia owns shares in Sasseur REIT.
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 the shares of Boustead Singapore Ltd, Hongkong Land Holdings Limited, and Raffles Medical Group Ltd.