SINGAPORE:

Blue-chip stocks have long been the choice of seasoned investors seeking stability and dependable returns. As we look ahead, there are three standout companies that have reported impressive profit growth and deserve a spot on your buy watchlist, according to insights from The Smart Investor.

1. United Overseas Bank (UOB)

UOB, Singapore's third-largest bank, released robust financial results for Q3 2024. The bank's net interest income saw a significant 1% rise year-on-year (YoY) to S$2.5 billion, while fee income surged by 7% YoY to Singapore S$630 million. More impressively, non-interest income skyrocketed by 70% YoY, reaching S$744 million. Overall, total income advanced by 11% YoY to S$3.8 billion, with operating profit climbing 10% YoY to S$2.2 billion and net profit increasing by 16% YoY to S$1.6 billion.

UOB's healthy loan portfolio also grew by 5% YoY to S$334 billion, with a steady net interest margin (NIM) of 2.05%. The increase in fee income can be attributed to rising wealth management demands and a notable rebound in credit card spending. Looking forward to 2025, UOB remains optimistic, forecasting sustained high single-digit loan growth and double-digit fee growth. CEO Wee Ee Cheong revealed plans for an extra S$2 billion to S$2.5 billion in capital from Basel IV reforms—indicating possibilities for shareholder returns through increased dividends or share buybacks.

2. Singtel

Singapore's telecommunications giant Singtel gave an insightful report for the first half of fiscal 2025 (1H FY2025), which concluded on September 30, 2024. While operating revenue dipped 0.5% YoY to S$7 billion, operational efficiencies were noted as operating expenses lowered by 3.7% YoY to S$5.2 billion, leading to a 7.4% increase in operating profit to S$1.9 billion. However, net profit saw a significant drop of 42% YoY to S$1.2 billion, impacted by an exceptional gain recorded in the previous year.

Despite this, Singtel's underlying net profit climbed by 6% YoY, and the company declared a total interim dividend of S$0.07—35% higher than the prior year. Notably, Singtel's Australian subsidiary, Optus, contributed strongly, reporting a whopping 58% YoY increase in operating profit to A$223 million. For the second half of fiscal 2025 (2H FY2025), Singtel is refining its ST28 strategy to optimize operating profit further and enhance capital management.

3. SATS Ltd

SATS, known for its air cargo handling and food services, has rebounded impressively with its first-half results for fiscal 2025 (1H FY2025), showcasing a 14.8% increase in revenue YoY to S$2.8 billion. Operating profit surged more than threefold from S$72 million to S$240.1 million, while net profit jumped to S$134.7 million from a net loss of S$7.8 million the prior year.

Additionally, SATS reported a positive free cash flow of S$113.2 million compared to a negative S$20.7 million in the same period last year. With flights handled increasing by 5.5% YoY to 316,000, cargo tonnage rising 17.5% YoY to 4.4 million tonnes, and aviation meals served peaking at 32.3 million—a 26.1% YoY hike—SATS is well-positioned to continue capitalizing on the recovery in travel and air cargo demand as we move into the year-end peak season.

In summary, if you're seeking solid investment opportunities in Singapore's stock market, these blue-chip stocks—UOB, Singtel, and SATS—demonstrate promising profit growth and strategic plans that could potentially enhance shareholder value. Keep an eye on these companies as they navigate the evolving economic landscape!