9 undervalued stocks in Singapore (September 2024) (2024)

There are 623 stocks listed on the Singapore exchange. I’ve limited the dataset to theStraits Times Index (STI) constituent stocks, then use the SGX Stock Screener to filter for those with a Price-to-Book (PB) ratio of less than 1 which means that they are trading below their net asset value.

Would we be able to find undervalued blue chip stocks in the Singapore market today? Well as of 3 September 2024, here are the 9 undervalued stocks in Singapore we’ve identified:

9 undervalued stocks in Singapore (September 2024)

p.s. Quite a few of these undervalued stocks are down by 10% -20% YTD! Alex shared his analysis and picked 2 of these undervalued stocks as potential buys.

1. Hongkong Land (H78): P/B 0.27

Hongkong Land is a property investment, development and management group and is considered one of the property blue chip stocks in Singapore.

As its name suggests, most of its portfolio is concentrated in Hong Kong (57%). In Singapore, Hongkong Land owns part of the Marina Bay Financial Centre (MBFC) properties. Their portfolio of investment properties are primarily office and retail properties, and recently made our list of Singapore Blue Chip stocks with Moats.

However, Hongkong Land continues to struggle due to its exposure to Hong Kong and China properties. In their latest 1H2024 results announced on 1 Aug, they reported an an underlying loss attributable to shareholders of US$7 million and an underlying loss per share of US¢0.31, both significantly lower than the prior year. This included a non-cash provision of US$295 million for China Development Properties. Excluding this provision, the underlying profit attributable to shareholders was US$288 million, 32% lower than the previous year.

HongKong Land also recorded a loss attributable to shareholders of US$833 million, up from a loss of US$333 million in the same period in 2023. This increase was driven by unrealized net non-cash losses from revaluations of the Investment Properties portfolio, primarily due to a modest decrease in market rents for the Hong Kong office portfolio.

That said, Hongkong Land has continued to pay out dividends even through the tough times. At the point of update, its dividend yield is about 5.9%.

Hongkong Land’s P/B is currently at 0.27, making it the most undervalued stock on this list. This is also lower than its historical average of 0.3 and its industry P/B of 0.4.

2. Jardine Matheson Holdings (J36): P/B 0.37

Jardine Matheson (JDM) is a conglomerate with a diverse range of businesses under its umbrella, with a hand in sectors ranging from property to retail and even heavy machinery and construction.

Given JDM’s complex business and size, Alvin had ranked it as “JOMO” in his Singapore Blue Chip Stocks ranking video.

It holds 75% of , 52% of Hongkong Land and many more.

JDM delivered weaker results in the 1H2024, with underlying net profit attributable to shareholders for the first half of 2024 at US$550 million, 33% below the same period last year. JDM was impacted by impairments in Hongkong Land’s Chinese mainland Development Properties business and challenging market conditions in Indonesia and Vietnam. There was, however, an encouraging improvement in DFI Retail’s year-on-year performance.

JDM has continued paying out dividends despite the challenges and at the point of update, its dividend yield is about 6.5%.

Jardine Matheson is trading at a P/B of 0.37 at the point of update which is below its historical P/B of 0.6 and its industry average of 0.9 which suggests that it is undervalued.

Please keep in mind that JMD’s business is cyclical, such stocks are not that suitable for holding long term. Instead, you might want to rely on its momentum and consult related technical indicators if you wish to ride JDM’s price action.

3. UOL (U14): P/B 0.41

UOL is a real estate management company with an extensive portfolio of development and investment properties.

The business environment continues to be challenging for UOL. Group revenue was down 7% in 1HFY2024, to $1.27 billion, with lower contributions from property development, partially offset by higher revenue from hotel operations and property investments.

Group pre-tax profit before fair value and other gains/losses was up 7% to $245.3 million due mainly to higher earnings from property investments, hotel operations and dividend income.

At the point of update, UOL’s dividend yield is about 3.7%. Its current P/B of 0.41 is lower than its historical P/B of 0.6.

4. City Developments (C09): P/B 0.54

City Developments Limited (CDL) is a real estate operating company with a diverse property portfolio of residential, commercial and hotel properties (M social and Millennium hotel brands) located worldwide.

They are involved in property development, asset management and hotel operations. CDL also owns ~ 50% of iREIT Global which has a portfolio of commercial and retail properties across Europe.

CDL achieved a lower revenue of S$1.6 billion for 1H 2024, down by 42%, as 1H 2023 included a S$1 billion contribution from Piermont Grand, which was recognised in its entirety when the EC project obtained its Temporary Occupation Permit (TOP) in January 2023. The Group registered a pre-tax profit (PBT) of S$155.4 million for 1H 2024, down by 13%, largely due to higher financing costs and lower profits from the property development segment.

Net attributable profit after tax and non-controlling interest (PATMI) achieved a 32.0% increase to S$87.8 million (1H 2023: S$66.5 million), due to divestment gains as part of the Group’s capital recycling efforts

CDL has several launches in its pipeline with about 2500 units scheduled for launch in 2024-2025. After factoring in fair value on investment properties, the Group’s net gearing ratio stands at 69% (FY 2023: 61%), with average borrowing cost at 4.5%.

As of the current update, City Dev is currently trading at a P/B of 0.54. Compared to its historical P/B of 0.8 and their industry sector’s P/B of 0.8, City Dev seems to be undervalued.

5. Mapletree Pan Asia Commercial Trust (N2IU): P/B 0.75

Mapletree Pan Asia Commercial Trust (MPACT) is the renamed entity after Mapletree Commercial Trust (MCT) acquired and merged with Mapletree North Asia Commercial Trust on 3 Aug 2022.

Following the merger, MPACT now has 18 properties across five key gateway markets of Asia – five in Singapore, one in Hong Kong, two in China, nine in Japan and one in South Korea. We covered the merger here.

While MPACT is currently undervalued (based on its Price/book), it has delivered outstanding results over the last 10 years. Alvin shares his deep dive into SREIT performance here.

Although its Singapore portfolio did well, MPACT’s performance is being held back by its China portfolio and this trend will likely continue for the near future. You’ll need to be comfortable knowing that the China property market may not perform as well, especially in the short term.

Amidst the challenging environment, MPACT was able to sustain its financial performance in 1QFY24/25, maintaining its Gross revenue and Net Property Income. This stability was driven by the robust Singapore portfolio, with its higher income successfully mitigating adverse foreign exchange impact on overseas contributions and ongoing market adjustments in Japan and China.

However, Distribution per Unit (DPU) for the quarter was 4.1% lower YoY at 2.09 Singapore cents, reflecting the impact of increased finance costs in the current high interest rate environment.

The REIT has also taken measures to defend against headwinds. It’s fixed rate debt is kept above 70% to shield against interest rate uncertainties and has increased to 78.9% as at 30 Jun 2024. Its Aggregate Leverage Ratio remains at 40.5% and adjusted Interest Coverage Ratio has lowered to 2.8x (from 3.2x last year).

On the dividend yield front, MPACT is currently yielding 6.4%.

As of the current update, MPACT is currently trading at a P/B of 0.75. Compared to its historical P/B of 0.9, MPACT seems to be underpriced currently.

6. Wilmar International Limited (F34): P/B 0.76

Wilmar International is a consumer goods and commodity conglomerate involved in the entire supply chain. Some of its business processes include the cultivation of palm oil and sugarcane, distribution of consumer food products as well as processing and distribution of animal feeds and industrial agri-products like biodiesel.

Wilmar achieved a satisfactory set of results in 1H2024 despite the challenging operating environment. Refining margins for tropical oils are expected to remain challenging whilst demand and margin for soybean meal products are expected to improve with lower soybean prices.

Revenue across all the Group’s core segments declined 5% to US$30.93 billion as commodity prices decreased in 1H2024. This was partially offset by higher sales volume during the period which allowed Wilmar to report a 5% increase in core net profit to US$606.3 million and a net profit of US$579.6 million.

The improvement was driven by better performances in the Feed & Industrial Products and Food Products segments but partially offset by lower contributions from the Group’s joint ventures & associates as well as sugar milling operations.

Wilmar has been paying dividends since 2013. At the point of writing, its dividend yield is about 5.4%.

At the current update, Wilmar International is currently trading at a P/B of 0.76, which is lower than its historical P/B of 1.

7. Mapletree Logistics Trust (M44U): P/B 0.92

Mapletree Logistics Trust offers exposure to logistics real estate across Asia. At the point of writing, its portfolio is valued at S$13.4B with an occupancy of 95.7% at a weighted average lease expiry of about 2.9 years.

In its latest 1QFY24/25 earnings, MLT reported a decline in Gross Revenue of 0.3% Y-o-Y to S$181.7 million due to lower contribution by China, absence of revenue contribution from divested properties and currency weakness (JPY and CNY). Property expenses and borrowing costs increased by 3.9% and 9.4% respectively due to enlarged portfolio, higher utility expenses, higher average interest rate and incremental borrowings. This was partly offset by currency weakness and loan repayments respectively. DPU decreased 8.9% Y-o-Y to 2.068 cents.

As of the current update, Mapletree Logistics Trust is currently trading at a P/B of 0.92. Compared to its historical P/B of 1.2, MLT seems to be slightly undervalued. However when compared against its industry peers with a historical P/B of 0.8, MLT is considered overvalued.

MLT rarely trades below a P/B of 1, so this might be a good time to take a deeper look into this REIT if you’d like to load up on some REITs in 2024.

Despite its current valuation, MLT was one of only three S-REITs that increased their dividend payout in 2023. The REIT also made our list of top 10 Blue Chip Stocks with consistent payout!

8. Frasers Logistics & Commercial Trust (BUOU): P/B 0.94

is a REIT that gives you exposure to a portfolio of 112 industrial and commercial properties valued at ~S$6.9 billion across five major developed markets.

As of FLCT’s latest (3QFY24) business update, they have maintained a healthy aggregate leverage at 33.2%, with 72.9% of their borrowings made at fixed rates.Portfolio occupancy remained high at 95% with over 90,000 sqm of space leased out in 3QFY24.

FLCT is currently trading at a P/B of 0.94. Compared to its historical P/B of 1.2, FLCT appears to be slightly undervalued.However, if compared against its industry sector’s P/B of 0.8, FLCT seems to be overvalued as of September 24.

REITs are seeing the impact of the prolonged high interest rates environment, with many reporting lower DPUs. If you’re a REIT investor, here’s what you must know about the state of S-REITs now.

9. CapitaLand Investment Limited (9CI): P/B 0.97

CapitaLand Investment (CLI) is a REIT with a longstanding history. It underwent a major restructure and the new CLI which includes the fund management and lodging business segments was listed as 9CI in 2021.

As with most REITs, CLI is facing challenges due to macroeconomic headwinds. Revenue was up 1% to S$1,365 million in 1H2024. CLI’s Fee Income-Related Business (FRB) revenue grew by 8% year-on-year to S$561 million, while its FRB’s contribution to Operating PATMI grew to 63%, up from 49% in 1H2023.

CLI registered a total PATMI of S$331 million and Operating PATMI of S$296 million for 1H 2024, with portfolio gains at S$35 million. However, CLI’s stronger FRB was offset by the weaker Real Estate Investment Business (REIB), which was impacted by higher interest expenses and unfavourable foreign exchange rates.

CLI also made significant progress in its asset-light transition and diversification strategy, unlocking capital recycling of S$1.7 billion to be redeployed for growth.

As of the current update, Capitaland Investment is currently trading at a P/B of 0.97. While that makes CLI look undervalued, if we were to compare against its industry sector’s P/B of 0.8, CLI remains overvalued against its peers.

That said, CLI is a REIT that rarely trades below or close to a P/B of 1, so this might be a good time to take a deeper look into this REIT as well.

Conclusion

I’ve listed 9 undervalued stocks in Singapore for September 2024, based on their Price-to-Book ratio and I hope this article gave you some investing ideas to research into.

Also, please keep in mind that although PB may be a good primary filter of undervalued stocks, you should do your own deeper research into the fundamentals and performance of any company that you wish to invest in, given the challenges and headwinds that some might be facing.

If you’re not sure how to start, refer to our value investing guide, or join Alvin at his upcoming webinar where you’ll learn how you can pick undervalued stocks using Dr Wealth’s i3 investing strategy.