To The Moon

Although many investors have been attracted by the liquidity and volatility of overseas markets, there are still good opportunities for value investors in the Singapore stock market today. Currently, there are 672 stocks listed on the Singapore exchange, a tad too many to look through. Hence, I limit the dataset to the Straits Times Index (STI) constituent stocks, then use theSGX Stock Screenerto filter for those witha Price-to-Book (PB) ratioof less than 1 which means that they are trading below their net asset value. As of 4th April 2022, here are: Source From: https://www.drwealth.com/undervalued-stocks/ 7 undervalued stocks in Singapore Stock Name Stock Ticker Price/Book Value Dividend Yield (%) Sector $KEPPEL CORPORATION LIMITED(BN4.SI)$ BN4 0.97 5.08 Consumer Goods Conglomerates $CITY DEVELOPMENTS LIMITED(C09.SI)$ C09 0.92 0.98 Real Estate $Yangzijiang Shipbuilding Holdings, Ltd.(YSHLF)$ BS6 0.81 3.49 Industrial Goods $SIA ENGINEERING CO LTD(S59.SI)$ C6L 0.75 0 Transportation $JARDINE MATHESON HLDGS LTD(J36.SI)$ J36 0.68 3.50 Consumer Goods Conglomerates $UOL GROUP LIMITED(U14.SI)$ U14 0.6 2.08 Real Estate $HONGKONG LAND HOLDINGS LIMITED(H78.SI)$ H78 0.34 4.25 Real Estate Keppel Corporation (BN4) – P/B: 0.97 Keppel Corporationstarted as a shipyard but its business has evolved gradually over the years and it has grown into a conglomerate since. In 2020, Keppel announced its “Vision 2030” plan to grow the company into an integrated business and powerhouse for sustainable urbanisation. Since then, they have made moves inline with the Vision 2030 which include their latest announcement on the divestment of Keppel Logistics, as well as their merger with Sembcorp Marine (Alex did a good summaryhere). Despite taking a hit in 2020 due to the pandemic, Keppel Corporation’s net income recovered in 2021: Keppel Corp’s historical net income. Source: TradingView Dividend investors received a 3.7% yield in 2021 and at the point of writing, Keppel Corporation’s dividend yield is about 5.08%. Source: FinboxCity Developments (C09): P/B 0.92 City Developments Limited (CDL) is a real estate operating company with a diverse property portfolio of residential, commercial and hotel properties (M social and Millennium hotel brands) located worldwide. They are involved in property development, asset management and hotel operations. Their net income took a significant hit in 2020 and they had struggled to meet earning estimates in 2021. However, 2022 may be a better year for them as countries start reopening. City Dev owns about 38% ofCDL Hospitality Trustand they might reap the benefits as demand for hotel rooms recover. City Dev’s historical net income. Source: TradingView As a bonus, City Dev has been paying a steady stream ofdividendssince 2013: Source: Finbox City Dev made it onto this list because it is currently trading at a P/B of 0.92. However, compared to their historical P/B of 0.9 and their industry sector’s P/B of 0.8, City Dev still seems overvalued. Yangzijiang Shipbuilding (BS6): P/B 0.81 Shipbuilding company Yangzijiang (YZJ) operates mainly in China and has a long history having been founded in 1956. They build and deliver a good range of commercial ships from containerships to Oil tankers. It also has exposure to the clean energy sector through its range of clean energy ships which include LPG vessels and LNG ships. YZJ experienced good recovery in 2021 where they saw a recovery in revenue and a spike in ship orders: On top of their shipbuilding business segment, YZJ also has an investment arm which recorded a gross profit margin of 95% in FY21. As of 1 April 2022, Yangzijiang has officially announced their intention to spin off their investment armfor a separate listing (as “Yangzijiang Financial (YZJFH)”) on SGX. Shareholders are due to vote on the decision in an EGM on 18 April. At the point of writing, YZJ’s dividend yield is about 3.49% and this is their historical dividend yield: Source: Finbox Yangzijiang is currently trading at a P/B of 0.81 which is slightly higher than its historical P/B of 0.8 but significantly lower compared to the sector P/B of 2.4. You might want to note that YZJ operates in a cyclical sector, hence P/B might not be the best valuation metric here. If you want to time cyclical stocks better, join Alvin at theupcoming QMT webinarto learn how. Singapore Airlines (C6L): P/B 0.75 Singapore Airlines (SIA), our national carrier, requires no introduction. It was hit badly by the pandemic and had to carry out several rounds of fundraising, mainly through the issuance of mandatory convertible bonds, as such they have not been paying dividends. SIA’s historical net income. Source: TradingView As the world opens up gradually in 2022 and commercial flight volume picks up, SIA may finally see the light at the end of the tunnel. Changi Airport Passenger Traffic Apr 20 – Feb 22 At the point of writing, SIA is trading at a P/B of 0.75 which is below its historical average of 0.9 but in line with its industry average of 0.7. Given that its industry has taken a hit which could be reflected in the P/B which suggests that SIA could be slightly under-priced. You can read ourdeep dive on Singapore Airlines here. Jardine Matheson Holdings (J36): P/B 0.68 Jardine Matheson (JDM) is a conglomerate with a diverse range of businesses under its umbrella, with a hand in sectors ranging from property to retail and even heavy machinery and construction. It holds 75% ofJardine C&C, 52% of Hongkong Land and many more. Jardine Matheson’s historical net income. Source: TradingView Despite a fall in revenues in 2020, JDM continued paying out dividends, and at the point of writing its dividend yield is about 3.5%. Source: Finbox Jardine Matheson is trading at a P/B of 0.68 at the point of writing which is below its historical P/B of 0.8 and its industry average of 0.9 which suggest that it might be undervalued. UOL (U14): P/B 0.6 A real estate company with an extensive portfolio of development and investment properties, with 82% of its total assets in Singapore. Its hotel business segment took a hit during the pandemic as travel was restricted: That said, its key revenue driver is theproperty developmentsegment, which continue to do well during the property boom in 2021: UOL continued paying dividends throughout the pandemic and has a dividend yield of 2.08% at the point of writing. Source: Finbox UOL’s current P/B of 0.6 is lower than its historical average of 0.7 and its industry average of 0.8, suggesting that it is undervalued based on its price to book ratio. Hongkong Land (H78): P/B 0.27 Hongkong Land is a property investment, development and management group and is considered one of theproperty blue chip stocks in Singapore. As its name suggests, most of its portfolio is concentrated in Hong Kong (67%). As their investment properties are primarily office and retail properties, they struggled during the pandemic, posting losses in the past 2 years. HongKong Land’s historical net income. Source: TradingView Through it all, Hongkong Land has been actively carrying out its $500 million share buyback programme since Sep 2021. However, that alone may not be sufficient to keep its share price afloat amidst negative macro events such as China’ property market debt crisis and a generally weak Hong Kong property market. For a deeper analysis, read Alex’sreport on Hongkong Land’s FY21 results. Hongkong Land has continued to pay out dividends during the pandemic. At the point of writing, its dividend yield is about 4.25%. Source: Finbox Hongkong Land’s P/B is currently at 0.27, making it the most undervalued stock on this list. This is also lower than its historical average of 0.4. Conclusion I’ve listed 7 undervalued stocks in Singapore above and I hope this article gave you some investing ideas to research into. Do keep in mind that although PB may be a good primary filter of undervalued stocks, you should do your own deeper research into the fundamentals and performance of any stock that you wish to invest in. If you’re not sure how to start, refer to ourvalue investing guide, or join Alvin at his upcoming webinar and discover how you can pick undervalued stocks usingDr Wealth’s i3 investing strategy.