• Singapore received over 9 million tourist arrivals from the start of 2023 to end August, a 204.5% year-on-year increase. Despite the slight dip in visitor arrivals in August, large scale events such as F1 and upcoming major concerts lined up over the next few months could see visitor arrivals climb up.

• The 10 most actively traded stocks in the tourism and hospitality sectors have booked net institutional inflows of S$2 million, and returned an average 2.3% total returns in the year-to-date ending 21 Sep.

• Of the 10, Singapore Airlines (SIA) was the best performing stock in the year-to-date, with 24.2% total returns. The Group announced record quarterly net profits of S$734.0 million and record quarterly passenger load factor of 88.9%. SIA was amongst beneficiaries of the reopening and tourism recovery theme as international air travel eased globally from end 2022. SIA sees that it is well positioned in this operating environment, despite intensified competition in the coming months as more capacity is injected into international routes.

12 to 14 million tourist arrivals expected this year

International visitor arrivals to Singapore in August dipped slightly to 1.31 million in August, due to seasonality and after school holidays. However, large scale international events such as the Singapore Formula 1 Grand Prix and major concert events (e.g. Coldplay, Taylor Swift) lined up over the next few months could see visitor arrivals climb up.

The Singapore Tourism Board (STB) expects international visitor arrivals to Singapore to hit 12 million to 14 million in 2023, with full tourism recovery expected by 2024. In August, Changi Airport Group also saw 5.15 million people in air traffic passenger movement, a 55.1% YoY increase.

SGX’s Tourism & Hospitality-related plays

The 10 most active stocks that represent the travel and hospitality industries have returned an average 2.3% total returns in the year-to-date (YTD) ending 21 Sep. Singapore Airlines was the best performing stock in the YTD, with 24.2% total returns, followed by Frasers Hospitality Trust at 15.4% and ComfortDelGro at 8.6%. The 10 stocks span across 3 sectors – Industrials, Consumer Cyclicals and REITs – with SIA, Genting Singapore and CapitaLand Ascott Trust being the most traded stock in each sector.

The 10 stocks booked a combined net institutional inflow of S$2 million in the YTD, in contract to the broader Singapore market which recorded S$2.7 billion of net institutional outflows. Amount the stocks, Genting Singapore and SIA led the net institutional inflows in the year-to-date.

Source: SGX, Bloomberg (data as of 21 Sep 2023).

Singapore Airlines (SIA)

Incorporated in 1972 and listed in 1985 on the SGX Mainboard, SIA is the national flag carrier of Singapore. The Group has more than 20 subsidiaries, including SIA Engineering Company and Scoot, their low-cost subsidiary. With a market capitalization of over S$20 billion, SIA is the 6th largest passenger airlines in the world, and currently offers flights to over 130 destinations globally.

• In its latest Q1 FY2023/24 results, the Group reported operating profit of S$754.5 million (growing 35.6% YoY), driven by passenger revenue which rose over a billion on the back of a record quarterly passenger load factor. It also announced record quarterly net profits of S$734.0 million, +98.4% YoY and its highest quarterly performance in its history. Its strong first quarter results also follow on from a robust full year FY2022/23 results – recording net profit of over S$2.16 billion, a S$3.12 billion swing from the net loss of S$962.0 million recorded the year before.
• Group passenger capacity expanded by 32.4% year-on-year as restrictions on international air travel eased globally, with 65.5% more passengers than a year ago, with strong demand across all route regions and market segments. The Group achieved a record quarterly passenger load factor (PLF) of 88.9%, with SIA’s PLF at a record 88.1% and Scoot’s at a record 91.7%. SIA was amongst beneficiaries of the reopening and tourism recovery theme as international air travel eased globally from end 2022.
• Cargo segment saw performance decline YoY as demand for air freight continued to soften. Cargo loads dipped 11.3% year-on year, while capacity grew 12.1%, primarily from the increase in bellyhold capacity as more passenger flights returned to service.
• Riding on the recovery momentum, SIA noted that demand for air travel is expected to remain robust for all route regions through the summer peak, with forward passenger bookings closely tracking capacity injection across most markets over the next 3 months. The Group sees that it is well positioned in this operating environment, despite intensified competition in the coming months as more capacity is injected into international routes. However, it also highlighted that cargo demand is expected to remain soft in the near term due to inflation and weak economic conditions.
• While the socio-economic impacts of COVID-19 devastated the airlines industry, back in mid-2020, SIA signalled its resolve that the next chapter of its transformation journey would focus on how it strengthens its position as a global aviation leader in the new world. So far in the first 8 months of this year, SIA is ranked 6th highest in net institutional fund inflow stock, after ranking as the 10th highest net institutional fund inflow stock in 2022.
• Prior to COVID-19, SIA commanded a 2.73% weight in the Bloomberg World Airlines Index, ranking at #15. Today, the stock is ranked #4, with a 5.82% weight. The stock is the largest by weight (11.44%) in the Bloomberg Asia Pacific Airlines Index, moving up 5 spots from end 2019.

Genting Singapore

Genting Singapore is involved in leisure and hospitality, oil palm plantations, power generation, oil and gas, property development, life sciences and biotechnology activities, with operations spanning across the globe.

• In their latest 1H 2023 results, Group net profit exceeded 100% YoY increase to S$276 million, with a 63% increase in revenue to S$1.08 billion. Adjusted EBITDA jumped 68% year-on-year to $452.5 million. Significant factors that affected the earnings of the Group was the influx of foreign visitor arrivals.
• At the property level, Resorts World Sentosa (RWS) delivered an Adjusted EBITDA of $268.4 million for the second quarter of 2023, a 37% improvement from the previous quarter. The better performance was a result of the rebound in non-gaming business, a higher-than-theoretical VIP win rate and recovery in regional gaming business.
• On a hold-normalised basis, gross gaming revenue (GGR) improved 3% quarter-on-quarter to $547.9 million, reaching near the levels of 2019. Non-gaming revenue improved 31% quarter-on-quarter to $188.7 million due to improved attractions’ attendance and spend per customer driven by intensified marketing and promotional efforts.
• In the first half of 2023, RWS presented a series of high-profile events and visitor experiences such as the first ever LIV Golf event in Singapore and Aaron Kwok’s Amazing Kode World Tour 2023 concert. Come September 2023, guests will see the return of Southeast Asia’s most iconic scare event - Universal Studios Singapore’s Halloween Horror Nights 11, featuring Netflix’s All of Us Are Dead. Additionally, as part of RWS 1.5, we have embarked on the renovation work of the Forum in May 2023.

CapitaLand Ascott Trust (CLAS)

CLAS is the largest hospitality S-REIT by market capitalisation at S$3,702.7 million. CLAS is the largest lodging trust in Asia Pacific, with S$8.1 billion in total assets and 107 properties, made up of 57 serviced residences, 18 hotels, 23 rental housing and 9 student accommodations.

• In its latest 1H 2023 results, gross profit rose 31% in 1H 2023 with stronger operating performance and quality acquisitions. Distribution per Stapled Security grew 19% to 2.78 cents in 1H 2023. Portfolio revenue per available unit (RevPAU) increased 44% in 1H 2023 on robust lodging demand. This was mainly attributed to the strong operating performance of CLAS’ properties as travel continues to pick up pace, moving closer to pre-pandemic performance as they continue to capitalise on increasing travel demand.
• Amongst CLAS’ key markets, Australia, Japan, Singapore, UK and USA performed above pre-Covid same-store pro forma RevPAU levels in 2Q 2023.
• Master lease gross profit grew 9% YoY in 1H 2023 mainly due to higher variable rent and contribution from new properties. Occupancy also remained stable at more than 95%. Europe properties continued to demonstrate strong performance, with 1H 2023 RevPAU above pre-Covid levels.
• To further uplift the value and profitability of its assets, 5 properties will undergo asset enhancement initiatives in FY2023 and are expected to command higher room rates post-refurbishment.
• They were the only hospitality trust that secured a 5-star rating on GRESB in 2021 and 2022, granted with the title of Global Sector Leader (Listed - Hotel).

Airports of Thailand TH SDR (Stock code: TATD)

Aside from the 10 stocks that represent Singapore’s travel and hospitality industries, traded on the SGX is also the Airports of Thailand TH SDR (Stock code: TATD).

Airports of Thailand PLC is the largest publicly traded company in Thailand and the world’s largest airport operator by market capitalisation. It operates Thailand’s 6 international airports accounting for >80% of air traffic and provides services related to air transportation. 3QFY23 (Apr-Jun 2023) earnings came in line with street’s expectations with net profit of Bt3.15bn (S$121.3m). Total revenue saw a jump of 163.85% YoY thanks to the rise in total number of flights and Passengers. Passenger volume also returned to 78% of pre-pandemic levels, with departure passenger service charges surging 204% yoy to Bt4.66bn (S$179.3m) in 3QFY23.

What are SDRs? Through SDRs, investors are now able to gain access to an underlying security which is currently listed on an overseas exchange. Benefits of SDRs include gaining access to overseas-listed companies on the SGX, cost simplification, convenience, CDP custody, flexibility to convert the SDRs to the underlying security, and transparency. Investors in SDRs will be entitled to certain benefits attached to the underlying securities, such as dividend and other cash distributions.

Enjoying this read?

• Subscribe now to the weekly SGX My Gateway newsletter for a compilation of latest market news, sector performances, new product release updates, and research reports on SGX-listed companies.
• Stay up-to-date with our SGX Invest Telegram channel.