SGX Market: 3 Stocks with Strong Earnings Momentum

The Straits Times Index (STI) opened slightly down at 3,239.4 on Monday morning. At the time of writing, the STI was trading up by 0.3% at 3,241.

Mostly Asian markets ended the week on a lower note as investors remained concerned over the interest rate hikes by the Fed.

Starting this week, the Asian markets were mixed after China announced a modest economic growth target of 5% for 2023. This week will also witness a huge leadership change in China as Xi Jinping begins his third term as President.

In February, the market capitalization for Singapore stocks fell as inflation worries overpowered the earnings season momentum. The STI fell by more than 3% during the month.

Financial Services Group, Maybank commented, “The continued cooling measures by the Federal Reserve and regional central banks likely drove up investor caution, resulting in pressures at the macroeconomic level.”

With the ongoing earnings season coming to an end, we have picked up three SGX stocks that have reported strong numbers in their results. These numbers could act as a catalyst for future growth in 2023.

Let’s take a look at them.

ComfortDelGro Corporation (SG:C52)

ComfortDelGro is a transport company from Singapore with a fleet of more than 30,000 vehicles on land.

In its full-year results for 2022, the company posted a jump of 40% in its earnings of S$173.1 million as compared to 2021. Total revenue during the period was up by 9%, with a major push from its taxi business.

Analysts remain bullish on the stock and see its taxi revenues as a major driver of revenues in 2023. With the opening of the Chinese economy and a rebound in global travel, the company is looking at better revenues and profitability in 2023.

Overall, C52 stock has a Moderate Buy rating on TipRanks. The average target price of S$1.45 implies an upside of 20% on the current price.

AEM Holdings Limited (SG:AWX)

AEM is a global manufacturer and supplier of engineering products for electronics, instruments, aerospace, and other industries.

For the full year 2022, the company posted record revenues of S$870.5 million, which was 53% higher on a year-over-year basis. The company also surpassed its guidance numbers due to higher product demand. The net profit for 2022 was up 38% at S$126.8 million.

According to TipRanks, AWX stock has a Moderate Buy rating. The average target price is S$3.54, which is 27% higher than the current price.

Singapore Technologies Engineering (SG:S63)

ST Engineering is a technology and engineering company that caters to various sectors like aerospace, defense, public health, digital technology, etc.

The company reported its full-year results for 2022 on February 24, with a 17% increase in its revenues. The company ended the year with an order book value of S$23 billion, of which S$7.2 billion will be delivered in 2023. The order book stands at 50% higher than the pre-COVID levels in 2019.

Moving forward, analysts are bullish on the company’s MRO (maintenance, repair, and overhaul) business with the reopening of China’s economy. This could boost the company’s overall earnings in the second half of 2023.

According to TipRanks’ consensus rating, S63 stock has a Strong Buy rating, based on all five Buy recommendations. The average target price is S$4.12, which suggests an upside of 20.4%.