Dividend Picks | Secure a chance with 3 undervalued stocks: VC2, F99, T12

• Nvidia shocked the market, in both ways. Some are worried about its high valuation.

• With low-PB , SGX's undervalued stocks may secure a chance.

• Stay tuned and supercharge purchasing power with CashBoost!

| Market recap

On January 8th, all three major US stock indices $.SPX(.SPX)$ $NASDAQ 100(NDX)$ $.DJI(.DJI)$ closed lower. The $NASDAQ Golden Dragon China Index(HXC)$ finished down 0.2%. Among the notable movers, $XPeng Inc.(XPEV)$ rose nearly 10%, and $MINISO Group Holding Limited(MNSO)$ gained over 5%.

- Megacaps:

$NVIDIA(NVDA)$ opened more than 2% higher, setting a new all-time high, but later dropped over 6% by the close, marking its largest single-day decline since September 3, 2024. Large techs broadly declined, with $Tesla Motors(TSLA)$ down over 4% and $Amazon.com(AMZN)$ falling more than 2%.

- Behind the Scenes:

As expected, at CES 2025, NVIDIA founder and CEO Jensen Huang unveiled a series of major new products. However, the market had already priced in the news, and as is often the case, investors sold the fact after buying the news. With NVIDIA's valuation already high, there was little additional short-term upside, leading to profit-taking. On the same day, a large volume of bullish options also expired.

- Highlights:

• $Innoviz Technologies Ltd.(INVZ)$ surged nearly 57.8% and closed up 10.55% after announcing a partnership with NVIDIA in perception software. $Aurora Innovation(AUR)$ , a self-driving technology company, saw a jump of over 51% and closed up 29.08% after securing a partnership agreement with NVIDIA for autonomous trucking.

• Pharmaceutical stocks rose against the broader market decline, with $Moderna, Inc.(MRNA)$ gaining over 11% and $Novavax(NVAX)$ up ~11%.

• On January 7th, the Chinese A-share market saw a strong rally in the consumer electronics sector, with $Cambricon Technologies Corporation Limited(688256)$ rising more than 10%, hitting a new all-time high.

| Cracking the code: PB Ratio

The Price-to-Book (PB) ratio is an important indicator used to assess the value of a stock or company. The PB ratio is calculated by dividing the stock price by the company's book value per share, which reflects how the market views the company's net assets.

• Formula: PB Ratio = Market Price per Share / Book Value per Share

• A high PB ratio indicates that investors are willing to pay more for each unit of net assets, which typically reflects an optimistic view of the company’s future growth prospects.

• A low PB ratio generally suggests that the stock is undervalued, potentially providing an investment opportunity.

| High Dividend Strategy: Low PB ratio

Investing in high dividend stocks with a low PB ratio offers several advantages:

1. Value Investment Opportunity: A low PB ratio suggests the stock is priced below its book value, often reflecting market skepticism about the company's future growth potential. This presents an opportunity for investors to purchase the stock at a discount to its intrinsic value.

2. Lower Downside Risk: Companies with low PB ratios typically have stronger balance sheets, meaning they are better positioned to withstand adverse market conditions. Their net assets provide a degree of protection for shareholders, reducing the risk of significant losses.

3. Potential Capital Appreciation: If the company returns to growth or improves its performance, the stock price may rebound, leading to capital gains. Additionally, companies with low PB ratios may unlock hidden value through asset restructuring or business transformations, providing additional returns for shareholders.

SGX Dividend Play (as of 8th Jan. 2025)

$Olam Group(VC2.SI)$ , $F & N(F99.SI)$ , and $Tat Seng Pkg(T12.SI)$ are noteworthy stocks to watch, as all have PB ratios below 1x and offer attractive dividend yields.

Olam Group (VC2): PB ~0.62x, Dividend Yield 5.98%

$Olam Group(VC2.SI)$ has a strong presence in the agriculture and food sectors, with a diversified business model that helps mitigate risks. The company holds significant influence and competitiveness in the global agricultural and food markets. As a Singapore government-linked company, Olam is one of the world’s largest cocoa processors, competing alongside industry giants like Barry Callebaut and Cargill. The company is also a major supplier of products like coffee, cashews, and cotton. In the food sector, Olam offers a broad range of products used in food processing, foodservice, and retail industries.

F&N (F99): PB ~0.69x, Dividend Yield 4.04%

$F & N(F99.SI)$ is a key player in the beverage industry. With its long history, diversified product portfolio, and deep brand roots in Southeast Asia, F&N remains one of the region's leading consumer goods companies. Whether it’s the iconic Tiger Beer or its wide range of beverages and dairy products, F&N is deeply integrated into the daily lives of Southeast Asian consumers. As the market continues to evolve, F&N is focused on maintaining its market leadership while also innovating to address future challenges and opportunities.

Tat Seng Packaging (T12): PB ~0.64x, Dividend Yield 6.21%

$Tat Seng Pkg(T12.SI)$ is one of Singapore's leading packaging manufacturers. The company holds a significant market share in the corrugated cardboard and packaging sector. As a well-established manufacturer, Tat Seng has a strong market presence in Southeast Asia, with its products widely used across industries, especially in consumer goods, electronics, and food and beverage sectors.

Stay tuned. Comment, like and subscribe to @Tiger_Contra

Boost purchasing power and trading ideas with CashBoost!

Open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.

Other helpful links:

• 💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉

• How to open a CBA.

• How to link your CDP account.

• Other FAQs on CBA.

• Cash Boost Account Website.