With the festive season just around the corner, all eyes are on Singapore’s thriving tourism sector.
By October 2023, the Singapore Tourism Board (STB) reported a remarkable 147.2% year-on-year (yoy) increase in visitors, reaching 11.3 million.
This surge sets the stage for a key question – could Singapore’s tourism-related stocks witness a significant year-end rally amidst the excitement of ZoukOut and the Marina Bay Countdown 2024?
Join us as we unpack the trends, analyse recent developments, and explore what these could mean for your investment portfolio.
Here, we spotlight the top 5 tourism stocks in Singapore, providing a focused look at each company’s potential in the festive rally.
Whether you are a seasoned investor or new to the stock market, this insightful guide offers valuable perspectives on the prospects of Singapore’s tourism stocks during this holiday season.
1. Singapore Airlines – Soaring to New Heights
- Sector: Industrials
- Market Cap: S$18.98 billion
- 1-Year Return: 22.84%
- 12-month Forward Dividend Yield: 5.96%
Singapore Airlines Limited (SGX: C6L) has shown formidable resilience and growth, with passenger traffic up by 24.5% yoy and a load factor of 87.4%.
This surge is primarily fuelled by the recovery in North Asia’s markets, including China and Japan.
The airline’s operational profit soared to S$1.55 billion in the H1 2023, while net profit jumped by 55.4% yoy.
With the Northern Summer travel season bringing unprecedented profits, Singapore Airlines could reinforce its leadership in the aviation sector and potentially lead the pack in the year-end rally.
2. Genting Singapore – A robust recovery is on track
- Sector: Consumer Cyclicals
- Market Cap: S$11.83 billion
- 1-Year Return: 17.53%
- 12-month Forward Dividend Yield: 3.57%
Genting Singapore Limited (SGX: G13)’s Q3 2023 revenue growth of 33% yoy, particularly at Resorts World Sentosa (RWS), reflects a robust recovery in the tourism sector.
The company’s total investment of around S$6.8 billion over the next eight years, including the Waterfront development at RWS, signals a strong commitment to growth and innovation.
With such developments on the horizon, Genting Singapore bodes well for long-term investors.
Aside from that, the anticipated increase in holiday tourism could significantly enhance Genting Singapore’s revenue streams and profitability in the near-term.
3. SATS – Cooking Up a Comeback
- Sector: Industrials
- Market Cap: S$4.01 billion
- 1-Year Return: -6.1%
- 12-month Forward Dividend Yield: NA
SATS Ltd (SGX: S58), pivotal in food solutions and gateway services, has rebounded with positive earnings in Q2 2024.
The company’s return to 82-83% of pre-COVID levels in crucial operating metrics suggests a robust recovery trajectory.
This growth indicates a potential uplift in the stock’s performance as the year concludes, particularly as global travel continues to regain momentum.
The year-end travel surge is likely to augment its recovery, potentially boosting its performance in the food solutions and gateway services sectors.
4. ComfortDelGro – On the Fast Lane to Recovery
- Sector: Industrials
- Market Cap: S$2.97 billion
- 1-Year Return: 16.99%
- 12-month Forward Dividend Yield: 3.45%
ComfortDelGro Corporation Limited (SGX: C52)’s impressive Q3 2023 performance, with a 54.5% yoy increase in profit after tax and minority interest (PATMI), marks a significant turnaround.
The company’s strategic moves, including the expansion of its EV charging network and revisions in taxi fares, are poised to bolster its market position.
As public transport and taxi services continue to recover, ComfortDelGro is well-placed for potential growth in the year-end period.
The holiday season is expected to accelerate the demand for public transport and taxi services, potentially enhancing ComfortDelGro’s year-end financials.
5. CapitaLand Ascott Trust – A Steady Climb in Lodging Profits
- Sector: REITs
- Market Cap: S$3.61 billion
- 1-Year Return: 3.37%
- 12-month Forward Dividend Yield: 7.10%
With a 23% yoy increase in 9M 2023 gross profit and revenue per available room (RevPAU) reaching 102% of pre-COVID levels, CapitaLand Ascott Trust (SGX: HMN) demonstrates a healthy demand in the lodging sector.
Key markets like Japan, Australia, and the USA are showing strong growth, positioning the Trust for potential gains as international travel regains pace.
The end-of-year travel boom, especially in these key markets, is poised to further enhance the Trust’s lodging revenues and profitability.
Navigating Singapore’s Tourism Stock Potential with Caution
As Singapore’s tourism sector shows promise of a year-end rally, driven by events like ZoukOut and the Marina Bay Countdown 2024, investors eyeing companies like Singapore Airlines, Genting Singapore, SATS, ComfortDelGro, and CapitaLand Ascott Trust must balance optimism with caution.
While these stocks demonstrate potential for growth, it is crucial to stay mindful of market volatility and broader economic factors that could impact the sector.
Prudent investment, informed by a keen awareness of both opportunities and risks, will be key in leveraging the festive season’s surge in tourism.
Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.
