4 Singapore Stocks Posting Higher Profits: Are They a Buy?
When it comes to share investments, there’s a saying that goes – when the business does well, the share price will follow.
This statement holds true because investors are willing to pay a higher price to own a piece of an improving business.
Hence, it makes sense for investors to look for businesses which are growing their revenue and profits over time.
Such businesses should see their share prices trending higher over time, thus netting attractive capital gains for their shareholders.
Here are four Singapore stocks that recently reported higher profits that you could consider adding to your buy watchlist.
Baker Technology (SGX: BTP)
Baker Technology deals with the design and construction of a wide range of equipment and components used in the offshore and marine sector.
These include offshore pedestal cranes, anchor winches, and skidding systems.
For the first half of 2024 (1H 2024), revenue jumped 33% year on year to S$52.4 million.
With the cost of sales increasing by just 19% year on year, Baker Technology’s gross profit surged by 69% year on year to S$19.8 million.
Net profit soared nearly threefold year on year to S$11.9 million.
The business also generated a positive free cash flow of S$17.2 million, down just 5.5% year on year.
Management, however, warned that the Russia-Ukraine war and Israel-Hamas conflict are casting a pall on the supply chain and energy markets.
The company will remain conservative and strengthen its capabilities while standing ready to seize any growth opportunities.
Penguin International (SGX: BTM)
Penguin International is a designer, builder, and operator of aluminium high-speed craft.
The group operates a fleet of crewboats, passenger ferries, and workboats and has aluminium shipbuilding yards in Singapore and Batam (Indonesia).
The shipbuilder reported a mixed set of earnings for 1H 2024 as revenue tumble 33.6% year on year to S$59.9 million.
Gross profit, however, improved by 19% year on year to S$26.9 million.
Net profit increased by close to 20% year on year to S$2.9 million.
After excluding trade receivables written off and provision for expected credit loss, net profit would have been S$5.3 million, for a 120.8% year-on-year increase.
Penguin International generated a positive free cash flow of S$7.3 million for 1H 2024, reversing the free cash outflow of S$7.1 million a year ago.
The demand for the offshore petroleum and wind activities remains strong, signalling a positive outlook for the group.
However, with geopolitical tensions, Penguin International is facing headwinds in rising logistics and material costs.
The group plans to engage affected suppliers and monitor the situation closely as these risks should linger in the near term.
MoneyMax Financial Services (SGX: 5WJ)
MoneyMax is a provider of financial services and a retailer and trader of luxury products in Southeast Asia.
The group also provides pawnbroking services and extends secured financing services to its customers.
MoneyMax has more than 100 stores in both Singapore and Malaysia.
For 1H 2024, revenue climbed 43% year on year to S$185.2 million, contributed by year-on-year revenue increases for all three of its core divisions.
The retail and trading arm posted a 50.7% year-on-year increase in revenue to S$87 million while the pawnbroking and secured lending divisions saw year-on-year revenue increases of 32.2% and 15.2%, respectively.
Net profit surged by 70.6% year on year to a record-high of S$16.6 million.
Management will continue to focus on expanding its network of MoneyMax outlets across Singapore and Malaysia.
The group will invest to enhance its capabilities and deliver better service offerings to ensure its customers remain loyal.
Management also believes that MoneyMax is well-positioned to continue its growth as one of the key players within its respective sectors.
Hong Leong Finance (SGX: S41)
Hong Leong Finance, or HLF, is Singapore’s largest finance company with a network of 28 branches islandwide.
The group offers an extensive suite of products and services such as fixed deposits and savings, mortgages and home loans, car loans, and share financing.
For 1H 2024, net interest income rose 11.1% year on year to S$112.7 million.
Operating profit improved by 14.8% year on year to S$61 million while net profit increased by nearly 13% year on year to S$52.6 million.
The group paid out an interim dividend of S$0.0375, an increase from the S$0.035 paid out in the previous year.
HLF recently rolled out its HLF Digital App, allowing customers to enjoy seamless and 24/7 access to its banking services.
The group also plans to implement strategic digital initiatives and payment solutions to meet the evolving needs of its customers.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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