4 Cheapest Value Stocks In Singapore [3 Jan 2021] Yanlord Land (SGX:Z25); HPH Trust (SGX:NS8U); China Everbright Water (SGX:U9E); Hong Fok (SGX:H30)
In 2021, Singapore's benchmark Straits Times Index (STI) declined about 12% to 2,843.81. While this seems like an undesirable performance, Singapore stocks (and its global peers) staged among the fastest recoveries after plunging over 30% in the height of the COVID-19 uncertainties in March.
Beyond the recovery in stock price, markets globally are also getting excited about the COVID-19 vaccine. On the back of this, investors have rotated out of healthcare and technology stocks into more cyclical sectors and cost stocks. This has translated in to the Straits Times Index (STI) generating close to double the gains of the S&P 500 Index in 4Q2021.
In this edition of four Stocks This Week, we take a closer look at 4 value stocks in Singapore. Inside a Singapore Exchange (SGX) Factor Investing in Singapore report, the worth factor applied an equal-weight combination of price-to-book (P/B) and price-to-earnings (P/E) multiples.
The report also noted that value stocks were highly determined by business cycles. Typically, the performance of value stocks was positive when GDP was positive, and negative once the economy is in recession. Value stocks tended to perform better when economic growth was accelerating.
When choosing to invest, remember that stocks can trade at low valuations for a lot of reasons. Avoid value traps by looking at the quality of stocks as well.
Yanlord Land (SGX:Z25)
With a market capitalisation of $2.2 billion, Yanlord Land (SGX:Z25) is indeed a estate developer focusing on residential, commercial and integrated properties in China and Singapore. In February 2021, Yanlord Land expanded its property business by acquiring Singapore-based United Engineers Limited (UEL), that has developed many iconic Singapore buildings and hold a number of property Development projects in China.
In the Factor Investing in Singapore report, Yanlord Land was ranked number 1 in the Value Factor as cheap stocks. Yandlord has a price-to-book value of 0.4, and according to the SGX Stock Screener tool, has a price-to-earnings ratio of 4.02.
In 2021, Yandlord Land delivered a total return of around -1%. It also paid out a dividend of $0.068, which translates to a yield of about 6.1% on its current stock price of $1.12 (as at 31 December 2021). Yanlord Land also ranked well within the Low Volatility and Dividend Factor in the report.
Hutchison Port Holdings Trust (SGX:NS8U)
HPH Trust (SGX:NS8U) has container terminals in Kwai Tsing, Hong Kong and 2 container terminals in Shenzhen, China. HPH Trust also has two river port terminals in Jiangmen and Nanhai respectively.
HPH Trust has a market capitalisation of US$1.7 billion ($2.3 billion). Its stock price has actually increased 15% in 2021 to US$0.198. This really is after several years of weak share price performance.
Ranked number 2 in the Factor Purchasing Singapore report, HPH Trust has a price-to-book of 0.5 and, based on the SGX Stock Screener, a price-to-earnings of 26.36. Additionally, HPH Trust pays a distribution yield of 6.1%.
Besides its high ranking as a cheap stock under the Value Factor, HPH Trust also ranked highly being an underperforming stock (Momentum Factor), high risk stock (Low Volatility Factor), poor stock (Quality Factor) and was placed number 1 as a high yielding stock underneath the Dividend Yield Factor.
China Everbright Water (SGX:U9E)
China Everbright (SGX:U9E) is in the water management and treatment business across several regions in China. Its business also encompasses project investment, planning and style, research and development, engineering and construction and processes management.
In 2021, China Everbright's share price plunged 30% to $0.225. Despite the broad recovery in the stock market after the plunge in March 2021, China Everbright is one of the counters that have lagged, recovering only 7% since its March lows.
Ranked because the 3rd cheapest stock through the Factor Investing in Singapore report, China Everbright has a price-to-book of 0.4, while its price-to-earnings is stated as 4.6 by the SGX Stock Screener. Moreover, China Everbright includes a dividend yield of 6.0%.
In addition, China Everbright seemed to be listed as a high growth stock underneath the Growth Factor.
Hong Fok (SGX:H30)
With a market capitalisation of $644 million, Hong Fok (SGX:H30) is definitely an integrated property developer and investor. During 2021, Hong Fok's stock price declined about 7%.
The Factor Purchasing Singapore report ranks Hong Fok as 4th in the cheap stocks portfolio under the Value Factor. According to the report, Hong Fok's price-to-book is 0.3, and SGX Stock Screener reports its price-to-earnings as 4.6.
Overall, Hong Fok was also 2nd in the highly ranked portfolio underneath the Multi-Factor. In 2021, Hong Fok's dividend yield was slightly over 1%.