UOI Jumps While Keppel Dips: Which SG Stock to Trade This Earnings Season?

With the week halfway through, star companies like $KEPPEL REIT(K71U.SI)$ , $Mapletree Log Tr(M44U.SI)$ , and $UOI(U13.SI)$ have released their latest earnings reports.

Apart from $UOI(U13.SI)$, which saw its stock rise after the report, the other companies experienced declines following their earnings announcements.

1. $UOI(U13.SI)$ United Overseas Insurance jumped 1.7% with rising insurance revenue and growing shareholders' equity.

Insurance revenue rose 14%, driven by higher release of contractual service margin and top-line growth. Shareholders' equity grew by 8.6%.

Higher valuations on equity and bond portfolios, supported by positive market sentiment and interest-rate cuts, led to a 63% increase in total comprehensive income after tax.

2. Different from Keppel DC REIT’s surge, $KEPPEL REIT(K71U.SI)$ and $Kep Infra Tr(A7RU.SI)$ experienced near 3% drop following earnings updates.

Both KIT and Keppel REIT are experiencing increased borrowing costs due to higher interest rates. As we mentioned in the previous article, analysts warned delayed positive impact due to fixed-rate debt. 

• KIT's increased interest expenses, and Keppel REIT's 33.3% jump in borrowing costs, are eroding their profitability and reducing distributable income.

• KIT saw a significant 60.1% decline in distributable income due to the absence of a special distribution and lower asset performance; Keppel REIT reported a 1.9% fall in distributable income, driven primarily by higher borrowing costs and rising leverage.

• Keppel REIT's leverage increased to 41.9%, close to the regulatory cap, raising concerns about refinancing. KIT's debt levels also show a dependence on capital expenditures that increase financial strain.

3. $Mapletree Log Tr(M44U.SI)$ dropped by 0.7% following its earnings report yesterday, and the downward trend continued today.

The drop was driven by lower DPU (down 10.6%), primarily caused by higher borrowing costs and lower divestment gains.

Gross revenue declined by 1.8% yoy to $183.3 million, while net property income decreased by 2.1% yoy to $158.6 million.

Outlook: CEO Jean Kam emphasized the focus on managing higher borrowing costs and rejuvenating the portfolio with over S$220 million in acquisitions and S$130 million in divestments year-to-date.

The earnings updates continue on October 24th, with Capitaland India Trust, Keppel Corporation, and Suntec REIT set to report their figures.

Wrapping up the week, Capitaland Ascendas REIT, iFAST, and Frasers Centrepoint Trust will disclose their earnings on Friday.

Will you bottom Keppel REIT and Keppel Infrastructure trust or chase the high of United Overseas Insurance?

Which SG stock are you bullish?

Leave your comments and join the discussion to win tiger coins!

For SG Tigers, do not miss the opportunity to make the most of the Tiger Cash Boost Account to enhance your investment and profit opportunities.

Join now to open a CBA today and Enjoy SGD 20,000 for unlimited and 0 Commision trading on SGX Equities and ETFS Before November.