4 Consumer Stocks Seeking to Bounce Back In 2021 [25 Dec 2021] SIA (SGX: C6L); Genting Singapore (SGX: G13); ComfortDelGro (SGX: C52); Thai Beverage (SGX: Y92)
2021 has been a sub-par year for many stocks listed on the Singapore Exchange (SGX). The Straits Times Index (STI) has fallen about 12% for that year, from 3,247 at the start of the year to 2,842 as of 24 December 2021.
Not surprisingly, some consumer stocks, especially those involved in tourism and transportation, have struggled in 2021 due to travel restrictions because of COVID-19.
In this week's edition of 4 Stocks This Week, we look at some of the biggest consumer stocks on the SGX, how they have performed in 2021 and what they can look forward to in 2021.
Singapore Airlines (SGX: C6L)
2021 is a year to forget for Singapore Airlines (SGX: C6L). The COVID-19 pandemic has pretty much wiped out global travel and this means SIA has lost a massive chunk of its annual revenue while still needing to maintain its aircraft and it is staff strength. In October 2021, SIA reported a 98.1% decline in passenger carriage compared to the year before.
Slowly and cautiously, the airline is adding flights to additional cities as interest in overseas travel may resume like a vaccine is rolled out across the world in phases.
Since its stock split on 6 May 2021 where its share price (after stock split) was $4.40, the company has generally been trading under $4. However, over the past month, SIA has been encouraged by news of vaccines being qualified in multiple countries which has boosted its share price. It's now trading at $4.26 as of 24 December 2021.
In the first half of its financial year ending 30 September 2021, SIA announced a loss of about $3.47 billion for the period.
Genting Singapore (SGX: G13)
Given that overseas tourism in Singapore is pretty much non-existing currently, the fact that Genting Singapore (SGX: G13) was able to announce that it was profitable for 3Q2021 was pretty. This comes off the back of local tourism obtaining in Singapore after the country went into Phase 2 and activities gradually resumed.
After its profit announcement on 14 November 2021, Genting Singapore stock price increase from $0.745 (13 November) to $0.805 (16 November). On 30 October, its stock price was at $0.645. Currently, it's trading at $0.85 (24 December).
While its current share price is still about 8.6% lower than its price at the start of the year ($0.93), investors would be encouraged to see that despite being in one of the worse hit sectors, Genting Singapore continues to be able to remain resilient. This bodes well for that company in 2021, when we can expect a vaccine to reduce the COVID-19 outbreak, allowing more and more people to resume leisure activities, both within Singapore and overseas.
ComfortDelGro (SGX: C52)
Like Genting Singapore, ComfortDelGro (SGX: C52) reported a net profit of $21.7 million for 3Q2021. Although this was significantly lower compared to the $70 million profit it made in 3Q2021, it's still better compared the losses it sustained in 1H2021. By region, ComfortDelGro saw operating profits in Singapore, China and Australia but a loss in the UK.
Similar to the other companies, ComfortDelGro has been encouraged by news of the vaccine. After ending 30 October at a trading price of $1.35, the organization is now trading at $1.66 as of 24 December. This is still significantly lower than its trading price of $2.37 at the start of the year. Investors would hope that 2021 will see local transport resuming to regular service when the pandemic is curbed.
Thai Beverage (SGX: Y92)
Thai Beverage (SGX: Y92), or ThaiBev, is among the largest beverage companies in Southeast Asia, and the largest in Thailand. It mainly sells spirits, beer, non-alcoholic beverages, and food.
As a significant part of ThaiBev's business relies on the consumption of alcohol, it comes as no surprise that the company's share price took a rough tumble earlier this year when many countries and cities in Southeast Asia including Singapore entered lockdown.
According to ThaiBev, its spirits segment remained resilient, driven by off-premise consumption, while beers, which relied more about on-premise consumption, were impacted by the temporary closure of entertainment venues and restaurants. Revenue fell 5.2% on a year-on-year basis.
Since hitting a low of $0.50 on 23 March 2021, it has bounced back significantly and it is now trading at $0.73 by 24 December 2021.
As we head into 2021, the outlook for many of those companies are starting to be positive as the rolling out of a vaccine offers to allow consumers to return to a normal world, where daily commutes and overseas travels are a norm. For investors, anticipation is that the worst is behind us and that these companies, having gone through tough times, will be in a good position to capitalise on the recovery.