4 Singapore Blue-Chip Stocks Undergoing Strategic Reviews: Are They Worth a Second Look?
This is especially true of blue-chip stocks, as many have long track records but tend to stick with a familiar playbook when it comes to running the business.
Hence, a strategic review can help to shed old practices and assets and allow the organisation to head in a new direction.
Such reviews may also unlock value along the way as the company pivots towards better profitability and returns.
Here are four blue-chip stocks that have announced strategic reviews and could be worth a second look.
Hongkong Land, or HKL, is a property development, investment, and management group with a real estate portfolio spanning more than 850,000 square metres of luxury retail, grade A office, and residential assets across Singapore, Hong Kong, and Shanghai.
The property giant initiated a wide-ranging strategic review back in November last year.
The review consisted of more than 50 in-depth interviews with tenants and investors along with consultation with more than 10 sector experts.
HKL plans to simplify its business to drive value, as the business lacks a clear positioning with its current businesses.
Therefore, the group intends to release capital from existing assets to accelerate its growth and improve its return on equity.
It has set a strategic vision to grow its underlying earnings and double its profit before tax by 2035, while also doubling its dividend in the same period.
At the same time, HKL aims to grow its assets under management (AUM) to US$100 billion and recycle up to US$10 billion of capital.
In line with this strategy, HKL will no longer invest in the build-to-sell segment but will instead invest in new integrated commercial property opportunities.
The group has seen some progress towards these objectives.
For 2024, its underlying profit excluding mainland China non-cash provisions fell by 12% year on year to US$724 million.
Despite this decline, the property group upped its 2024 dividend by 5% year on year to US$0.23.
Singtel is Singapore's largest telecommunication company and offers a range of mobile, broadband, and Pay TV services.
Singtel initiated its strategic review way back in May 2021 and has provided regular updates on the progress of this review as the years went by.
The telco reported a strong set of earnings for the first nine months of fiscal 2025 (9M FY2025) with underlying operating revenue inching up 0.7% year on year to S$10.6 billion.
Underlying operating profit rose nearly 13% year on year to S$1.1 billion, while underlying net profit climbed 11.3% year on year to S$1.9 billion.
The better performance was due to its Australian unit, Optus, as well as higher operating profit from NCS.
The strategic review, which involves capital recycling to unlock value from Singtel's assets, has borne fruit for income investors.
Singtel paid out a higher interim dividend of S$0.056 (1H FY2024: S$0.053) for the first half of fiscal 2025 (1H FY2025) and also dished out a value realisation dividend (VRD) of S$0.014.
The group intends to continue its recycling efforts to fund both its growth and value realisation dividends.
It has identified a pipeline of around S$6 billion worth of assets that can be monetised.
Keppel is a global asset manager providing sustainability-related solutions for the infrastructure, real estate, and connectivity sectors.
Keppel has gone through radical changes over the years, beginning with the unveiling of its Vision 2030 goals way back in May 2020.
This plan involved a transformation from being a conglomerate to an asset-light business with strong recurring income streams.
Over the years, Keppel has worked towards these goals, starting with the sale of its offshore and marine division back in November 2022.
Then, in May 2023, Keppel announced a major reorganisation to split its business into three platforms while updating its Vision 2030 goals.
Fast forward to today, and the asset manager reported a strong set of earnings for the first quarter of 2025 (1Q 2025).
Net profit excluding legacy assets improved by 25% year on year, with recurring income making up over 80% of the group's net profit.
Sembcorp Industries, or SCI, is an energy and urban solutions provider with a balanced energy portfolio of 25.1 GW and urban development projects spanning close to 14,800 hectares across Asia.
Back in March this year, SCI announced a strategic reorganisation and appointed managers for key business lines while identifying three growth engines to power the group's growth.
The group reported a 9% year-on-year decline in revenue for 2024 to S$6.4 billion because of a major planned maintenance shutdown of a cogeneration plant in Singapore, and also because of lower electricity prices.
Net profit, however, remained flat year on year at S$1.02 billion.
SCI declared a final dividend of S$0.17, more than double the S$0.08 that was paid out a year ago.
Coupled with the interim dividend of S$0.06, the total dividend for 2024 came up to S$0.23.
The higher dividend reflects management's confidence in the group's future performance and ability to generate sustainable returns.
Earlier this month, SCI signed a sale and purchase agreement to increase its stake in Senoko Energy to a maximum of 70%.
This acquisition is expected to be accretive to SCI's earnings.
Also in April, the group signed a joint venture agreement to boost the green hydrogen transition and renewable energy in India.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
The post 4 Singapore Blue-Chip Stocks Undergoing Strategic Reviews: Are They Worth a Second Look? appeared first on The Smart Investor.
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