• The top 5 stocks that booked the highest net institutional inflow YTD totaling S$427.5 million are Genting Singapore, Sembcorp Industries, Sembcorp Marine, SIA, and Thai Beverage.
• These 5 stocks generated an average return of 34.1% as at 25 April, outperforming the STI’s YTD total return of 1.4%.
• With a 26.6% total return on S$90.7 million of net institutional inflow YTD, Sembcorp Industries was the strongest performer among the 5 stocks. The group’s net profit in 2022 (before exceptional items) was S$883 million, up 87% from S$472 million in 2021. It maintains that renewable energy is expected to transform the global power mix through 2027 and become the largest source of electricity. On 30 March, the group completed the acquisition of 892MW of operational wind and solar assets in China, with the Group’s renewables portfolio of solar, wind, and energy storage in operation and under development globally, at 10.3GW.

Source: SGX, Refinitiv, Bloomberg

Company Highlight

Genting Singapore

• Group performance rebounded strongly on the back of travel recovery. For FY2022, group revenue grew 62% to $1,725.3 million while adjusted EBITDA increased 73% to $774.2 million from a year ago. Net profit after taxation rose 85% YoY.
• Expansion projects (RWS 2.0) have commenced. This includes the ongoing construction of the Singapore Oceanarium (SGO), Minion Land at Universal Studios Singapore, and supporting infrastructure facilities to cater to the overall expansion of RWS.
• RWS has also been successful in securing premium lifestyle events that appeal to affluent visitors. It will be the official venue to host several signature events such as the Asia’s 50 Best Restaurants 2023 and Wine Pinnacle Awards 2023.

Sembcorp Industries

• Strong performance for FY2022. Including discontinued operation turnover was S$9.4 billion, 21% higher than turnover of S$7.8 billion in FY2021. Group net profit (before exceptional items) rose 87% % from S$421 million in FY21 to S$883 million in FY2022.
• Significant growth achieved in renewables portfolio - secured 3.6GW of renewables capacity through acquisitions and organic growth across key markets, bringing the Group’s renewables capacity as at end 2022 to 9.8GW of renewables capacity.
• Accelerating transformation through the sale of Sembcorp Energy India Limited, comprising two supercritical coal-fired power plants, completed in January 2023.

Sembcorp Marine

• Shareholders gave overwhelming 95.28% support for the Proposed Combination with Keppel O&M at the Company’s EGM held on 16 February 2023.
• Merger with Keppel Offshore & Marine to strengthen its position as a premier global player offering offshore renewables, new energy and cleaner solutions in the offshore & marine sector.
• Significant improvement in its financial performance, turning EBITDA positive in 2H2022, and cutting full-year net loss by 78% YoY to -S$261 million for the 12 months ended 31 December 2022 (FY2022).

SIA

• Achieved record quarterly revenue in Q3 driven by sustained momentum in travel recovery. 3QFY2022/23 rose $358 million (+8.0%) QoQ to $4,846 million. SIA also reported its highest-ever quarterly operating profit of S$755 million and net profit of S$628 million, representing 11.4% and 12.7% YoY increase respectively.
• Group passenger capacity reached 80% of pre-Covid-19 levels in December 2022, higher than the average of 51% for the APAC region. The Group carried 18.8 million passengers during the nine months ended 31 December 2022, up nine-fold from a year before.

Thai Beverage

• For FY2022, total sales revenue increased 13.2% YoY to 272,359 million Baht, as easing of pandemic and travel restrictions drove growth in all business segments. EBITDA and net profit rose 15.7% and 26.2% YoY respectively.
• Continued recovery of the Thai economy in FY2022 was driven by a gradual improvement in economic activity as well as the relaxation of travel restrictions in Thailand and other countries. Reopening of entertainment venues such as pubs, bars and nightclubs has led to an increase in beverage consumption and YoY improvement in beverage sales.

Verdict…

By using the inflow of funds from institutions as a basis for judgement, we can clearly identify the criteria they use for stock selection. In addition to sound fundamentals, institutions now also prioritise the tourism industry. Out of five selected companies, three are related to tourism: Genting Singapore, SIA, and Thai Beverage. This suggests that institutions are maintaining a relatively optimistic outlook for the tourism industry in the post-pandemic era. Another industry that is favoured by institutions is the renewable energy sector. As countries around the world begin responding to zero carbon emission policies, the potential for growth in the renewable energy sector is enormous, which is why institutions are keen on investing in it.

After observation, we can see that the companies selected by institutions all have potential positive factors (whether in the short, medium, or long term). Whether it is the potential opportunities in the tourism industry caused by the overall environment or the government policies that promote the development of renewable energy, institutions are going with the trend. Since institutions have begun to invest in these two sectors, it would be worthwhile for you to also look into companies related to the tourism and renewable energy sectors on your watchlist for further research.