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3 Worst-Performing Singapore Blue-Chips in the First Half of 2019

The first six months of 2019 just zoomed past. Singapore’s Straits Times Index (SGX: ^STI) has been anything but stable during the period. Even though the index managed to rise 8.2% to 3,321.6 (close of 28 June 2019), there were many periods of huge ups-and-downs, largely due to uncertainties surrounding the US-China trade war.

Strong performers in 2019 first-half include Thai Beverage Public Company Limited (SGX: Y92) and ComfortDelGro Corporation Ltd (SGX: C52) as seen in an earlier article. Here, let’s look at the bottom three performers of the Straits Times Index in the first half of 2019.

Worst performer #3

Units in Hutchison Port Holdings Trust (SGX: NS8U) fell 6.1% to US$0.23 for the first half of 2019.

For the financial year ended 31 December 2018, the business trust posted a loss of HK$11.6 billion for 2018, mainly on the back of non-cash impairment losses. Without the asset impairment, net profit attributable to unitholders would have been lower by 22% to HK$737.7 million. With that, Hutchison Port Holdings Trust’s distribution per unit fell by 17.5% to 17.0 HK cents, down from 20.6 HK cents in the previous year.

The business trust’s woes continued into 2019. For the first quarter of the year, its net profit tumbled 33.4% to HK$96.9 million. Hutchison Port Holdings Trust said in its earnings release:

“In the first quarter of 2019, outbound cargoes to the US were weak, largely resulting from the front-loading of cargoes in the fourth quarter of 2018 in anticipation of the tariff increase by the US on Chinese exports originally scheduled to commence on 1 January 2019. The volume of outbound cargoes to the US is expected to be volatile in 2019 as the US/China trade dispute continues.”

At its unit price of US$0.23 on 28 June 2019, it had a price-to-book ratio of 0.6 and a distribution yield of 9.5%.

Worst performer #2

Jardine Matheson Holdings Limited (SGX: J36) saw its shares tumble 9.4% to US$63.02.

The conglomerate’s revenue for the 2018 financial year rose 10% year-on-year to US$42.5 billion, but profit attributable to shareholders plunged 56% to US$1.73 billion. Underlying net profit, which excludes non-trading items, grew 10% to US$1.70 billion. The underlying growth was due to strong performances from Astra and Hongkong Land Holdings Limited (SGX: H78), as well as an improved performance from Jardine Cycle & Carriage Ltd’s (SGX: C07) non-Astra businesses.

Ben Keswick, Jardine Matheson’s chairman and managing director, warned that the group expects to “face more challenging conditions in 2019 due to economic uncertainties affecting consumer sentiment and commodity prices.”

Jardine Matheson closed at US$63.02 on 28 June 2019, giving a price-to-earnings ratio of 14 and a dividend yield of 2.7%.

Worst performer #1

The worst performer of the Straits Times Index for the first half of 2019 was Dairy Farm International Holdings Ltd (SGX: D01), with a share price fall of 21% to US$7.15. It was a reversal in fortunes for the pan-Asian retailer as its shares rose 15% for the whole of 2018. In fact, the share price on 28 June 2019 was the lowest it has been since December 2016.

For the financial year ended 31 December 2018, Dairy Farm’s sales grew 4% year-on-year to US$11.7 billion, but net profit plunged 77% to US$92 million. To improve things, Dairy Farm’s supermarkets and hypermarkets businesses are undergoing a multi-year transformation plan. If the company’s management succeeds in turning its business around, Dairy Farm’s shares could be re-rated higher.

At Dairy Farm’s share price of US$7.15, it had a dividend yield of 2.9%.

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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 shares of Hongkong Land and Dairy Farm International. Motley Fool Singapore contributor Sudhan P owns shares in Hongkong Land.