There are 30 stocks in the Straits Times Index (STI), they are also known as blue chip stocks.
The pandemic has caused businesses to suffer, many of which had recorded much lower revenue and have had to swallow large losses.
I wanted to see if any of these blue chips managed to buck the trend and do the reverse – increase their revenue in their half yearly results that covered the pandemic period.
I found 9 of them, or almost a third of the index stocks.
Here’s the list in ascending order – from the lowest percentage increase in revenue to the highest:
Mapletree Industrial Trust (SGX:ME8U) +1%
MIT’s gross revenue rose from $201 million in 1H2019 to $202 million in 1H2020.
The increase was mainly due to the revenue contribution from the 14 data centres in the U.S. that were acquired during the financial year. The revenue increment was partly offset by rental reliefs due to the impact of Covid-19 and the decanting of tenants at Kolam Ayer 2.
MIT also managed to increase its distributable income by 13%.
ST Engineering (SGX:S63) +2%
ST Engineering increased its revenue from $3,511 million in 1H2019 to $3,572 million in 2H2020.
The increase was mainly due to the improvement in its marine sector performance and the acquisitions of MRAS and Newtec by the Aerospace and Electronics sectors.
But ST Engineering was not spared from Covid-19 as it has to face reduction in customer demand, supply chain challenges, and workforce disruption in the Aerospace and Electronics sectors.
Despite the increase in revenue, ST Engineering saw a decline in net profits by 4% y-o-y. The net profit was impacted by impairment of intangible assets, receivables, and fair value changes as the business outlook for some lines of business was forecasted to be poorer as a result of Covid-19.
Hongkong Land (SGX:H78) +2%
Hongkong Land saw its revenue increased from $803.9 million in 1H2019 to $820.2 million in 1H2020.
The increase was mainly from its sale of development properties, which was more than enough to offset the decline in rental revenue.
Despite reporting a higher revenue, Hongkong Land made a loss in 1H2020. This was due to the granting of pandemic-related retail rent relief, lower rents and decrease in the valuation of investment properties.
DBS (SGX:D05) +7%
DBS‘s total income rose from $7,260 million in 1H2019 to $7,752 million in 1H2020. The only one out of the three local banks to register an increase.
The bank set aside $1.26 billion for risks arising from Covid-19 and that resulted in the net profit for first-half of 2020 to decline by 26% from a year ago. Without this allowance, DBS could have reported a 12% increase in net profit.
Mapletree Logistics Trust (SGX:M44U) +9%
MLT increased its revenue from $242 million in 1H2019 to $264 million in 1H2020.
The revenue growth was mainly due to
- higher revenue from existing properties,
- completed acquisitions in Malaysia, Vietnam, South Korea and Japan and
- completed redevelopment of Ouluo Phase 2
The revenue growth could have been higher if not offset by the rebates granted to eligible tenants impacted by the Covid-19 and absence of revenue contribution from six divested properties.
Its distributable income increased by almost 6%.
Wilmar (SGX:F34) +12%
Wilmar’s revenue rose from $20,227 million in 1H2019 to $22,658 million in 1H2020.
This was driven by improved demand due to the Covid-19 pandemic. Consumer products sales increased significantly because people ate more often at home. In addition, the contribution of Goodman Fielders’ results has also boosted the revenue.
However, Wilmar saw lower demand from the hotel, restaurant and catering businesses due to the disruption by lockdowns in all its major markets.
The amazing part is that its net profit jumped 61%!
Ascendas REIT (SGX:A17U) +15%
Ascendas REIT increased its revenue from $455 million in 1H2019 to $521 million in 1H2020.
The increase in gross revenue was mainly contributed by the 28 U.S. business park properties and two Singapore business park properties, which were acquired in December 2019.
However, the revenue gain was partially offset by the rent rebate due to Covid-19, the non-contribution from Wisma Gulab after its divestment and lower occupancies of some properties.
Its distributable income increased by about 4%.
SGX (SGX:S68) +20%
SGX saw an increase in revenue from $477 million in 2H2019 to $574 million in 2H2020. 2H2020 was used because it would cover the Covid period since SGX financial year ends in 30 Jun of each year.
Here’s a breakdown of its revenue segments and the corresponding percentage increase:
- Fixed Income, Currencies and Commodities +23%
- Equities +14%
- Data, Connectivity and Indices +19%
It has been a good year for SGX as the stock market crisis brought the trading activities back. The revenue increment came from all asset classes. Meanwhile, market data and indices revenue rose because of the contribution from the acquired Scientific Beta Pte. Ltd.
Keppel DC REIT (SGX:AJBU) +32%
Keppel DC REIT was the best performing blue chip in terms of revenue increment. Revenue rose from $91 million in 1H2019 to $120 million in 1H2020.
The revenue increase was mainly due to the acquisitions of Keppel Data Centre Singapore 4, Data Centre 1 and Kelsterbach Data Centre.
Resilient blue chips
Here we are, 9 blue chips from the STI that were able to raise their revenues during the pandemic.
That said, I might have painted an over rosy picture because although they raised revenues, not all managed to increase their profits; Hongkong Land was even in losses. Wilmar, on the other hand, saw a 60% rise in its profits as the pandemic brought high demand for its consumer products.
DBS was a solid performer against UOB and OCBC as it was able to increase in both revenue and profits while the other two saw declines.
Lastly, the industrial REITs fared well as the supply chain became more crucial during the pandemic, and the data centres needed to cater more space for servers to support more virtual meetings and remote working requirements.
Below is the list of 9 blue chip stocks and their corresponding percentage increase in revenue:
| # | Stock | % increase in revenue 1H2020 vs 1H2019 |
| 1 | Keppel DC REIT | +32% |
| 2 | SGX | +20% |
| 3 | Ascendas REIT | +15% |
| 4 | Wilmar | +12% |
| 5 | Mapletree Logistics Trust | +9% |
| 6 | DBS | +7% |
| 7 | Hongkong Land | +2% |
| 8 | ST Engineering | +2% |
| 9 | Mapletree Industrial Trust | +1% |
