5 Undervalued Stocks in Singapore

The Singapore stock market, comprising over 600 listed companies, often reveals undervalued opportunities, especially among blue-chip stocks. As of July 2024, several prominent stocks are trading below their net asset values, presenting potential investment opportunities. Here’s a look at five such undervalued stocks, offering insights into their current market status and future potential.

1. Hongkong Land Holdings Limited (SGX: H78)

Hongkong Land Holdings Limited is notable for its exceptionally low Price-to-Book (P/B) ratio of 0.22. This figure reflects the stock’s significant undervaluation relative to its net assets. The company holds a substantial portfolio of premium office and retail properties, including significant assets in Hong Kong and Singapore, such as the Marina Bay Financial Centre. Despite its high-quality asset base, Hongkong Land has faced challenges due to sluggish property markets in Hong Kong and China. However, the stock’s high dividend yield of 6.8% is an attractive feature for income-focused investors, indicating a strong commitment to shareholder returns amidst ongoing market difficulties.

2. Jardine Matheson Holdings Limited (SGX: J36)

Jardine Matheson Holdings Limited, a diversified conglomerate with interests across various sectors including property, retail, and industrials, is trading at a P/B ratio of 0.34. This valuation is significantly below its historical average of around 0.6, highlighting its current undervaluation. Jardine Matheson’s diversified portfolio and robust dividend yield of 6.3% make it an appealing choice for investors seeking exposure to a broad range of industries. However, the company operates in cyclical sectors, so potential investors should be mindful of market fluctuations affecting its long-term performance.

3. UOL Group Limited (SGX: U14)

UOL Group Limited, a prominent real estate management and development company, is trading at a P/B ratio of 0.40. This is well below its historical average, suggesting that the stock is currently undervalued. The company’s extensive portfolio includes residential, commercial, and hotel properties. Despite facing a challenging business environment and a 16% decline in group revenue for FY2023, UOL has seen a resurgence in its hotel segment due to rebounding tourism. With a dividend yield of 3.8%, UOL presents a potential opportunity for investors interested in real estate, provided they are comfortable with the sector’s cyclical nature.

4. City Developments Limited (SGX: C09)

City Developments Limited (CDL) is another real estate heavyweight, with a P/B ratio of 0.53. This valuation is significantly below its historical P/B of 0.8, indicating potential undervaluation. CDL’s diverse portfolio spans residential, commercial, and hotel properties, both locally and internationally. The company has faced profitability challenges due to high financing costs and capital management issues, with net profit declining sharply in FY2023. However, CDL’s pipeline of upcoming property launches and its large-scale global operations make it a stock worth considering for those who believe in its long-term recovery potential.

5. Mapletree Pan Asia Commercial Trust (SGX: N2IU)

​Mapletree Pan Asia Commercial Trust (MPACT) is trading at a P/B ratio of 0.68, below its historical average. MPACT’s diversified portfolio spans across key Asian markets, including Singapore, Hong Kong, China, Japan, and South Korea. Despite strong performance in its Singapore properties, the trust faces challenges in its China portfolio, impacting its overall valuation. However, with a dividend yield of 7.2% and a solid track record of performance, MPACT remains an interesting option for investors seeking high yields and regional diversification, provided they are comfortable with the risks associated with its geographical exposure.