To The Moon

🌟🌟🌟As global crude oil crashes through the USD 100 per barrel milestone, a raw energetic current is tearing through the Singapore stock market.  For months, the Straits Times Index or STI tried to maintain its cool, insulated by its stable, defensive banks.  But with the Middle East supply stretching thin, triple digit oil has ceased to be an abstract metric.  It is affecting Singapore companies' balance sheets in real time.

Some local blue chips are surfing a wave of pure windfall profit while others are holding their breath as massive operational expenses begin to threaten their bottom lines.

2 Winners Riding the Crude Oil Wave:

$Sembcorp Ind(U96.SI)$  - The Strategic Play 

Sembcorp acts as the essential pillar of Singapore's power grid.  As macro oil and gas dynamics heat up, local wholesale electricity pricing surges right alongside them.  This expands Sembcorp's profit margins beautifully.  Sembcorp is actively converting these hefty cash flows to aggressively expand an expansive regional green energy portfolio.

Sembcorp's shares are trading steadily around SGD 6.14, enjoying a resilient monthly uptrend of over 10%.  It has a robust dividend yield of 3.61%, sweetening its status as a defensive cash cow.

Analyst target price sits comfortably at SGD 6.53, reflecting a highly stable stock.

The Verdict: Buy.  Sembcorp has turned broader macro inflation directly into a portfolio shield.

$YZJ Shipbldg SGD(BS6.SI)$  - The Strategic Play

As energy security concerns skyrocket globally, the rush to transport alternative clean fuels and replace aging fleets is hitting fever pitch.

Yangzijiang is sitting on a record shattering USD 22.4 billion order book stretched out to 2029 - 2030.  This order book is heavily dominated by high value dual fuel and LNG clean energy vessels.

Yangzijiang is currently trading near historic highs at SGD 4.98, supported by a massive 30.2% jump in historical net profit.  It offers a very healthy dividend yield of 4.02%.

The analysts target price is SGD 5.13 with some analysts scaling up to SGD 5.60.

The Verdict: Buy.  Yangzijiang is a premier global manufacturing powerhouse with guaranteed multi year revenue visibility that macro pressures cannot easily derail.

2 Losers Trapped in the Squeeze:

$SIA(C6L.SI)$  is Singapore's premier airline.  However its long haul routes are flying directly into an energy tempest.  Jet fuel stands as its single largest operating expense.  With crude oil staying elevated, the cost of keeping Singapore's pristine aviation fleet fueled is aggressively eating into the spectacular margins enjoyed during the post pandemic travel boom.

SIA's shares have been changing hands around SGD 6.66, breaking lower under intense monthly selling pressure.

However for dividend focused investors, SIA pays an attractive 6.61% yield.

Analyst target price sits marginally higher at SGD 7.01 but analysts are mixed with Neutral to Sell warnings.

The Verdict: Bye.  Take your profits and clear the runway.  The reality of a sustained lag in escalating fuel costs will likely restrict short term upside.

$ComfortDelGro(C52.SI)$ 

Comfort DelGro operates an extensive international network of mass public buses and taxi fleets.  This means facing the fuel pump daily.  Even with fare adjustment mechanisms designed to cushion costs over time, the inherent regulatory lag forces the company to absorb immediate spikes in fuel prices, especially across soft international segments.

Comfort DelGro is currently trading sideways at SGD 1.28, weighed down heavily by an operational earnings contraction in their taxi segment.

However for dividend focused investors, Comfort DelGro pays an attractive dividend yield of 6.16%.

Analysts Target Price is SGD 1.47 to SGD 1.56, though some cautious analysts are cutting their target price down to SGD 1.21.

The Verdict: Bye.  While Comfort DelGro serves as a traditional defensive income staple, rising fuel bills and intensifying taxi headwind mean that there is little growth catalyst for now.

Concluding Thoughts 

In a USD 100 oil environment, strategic selection is the only way to safeguard returns unless you have a long term horizon.  Market capitalisation alone will not shelter stocks from the reality of inflated supply chains.

To thrive in this environment, it is important to pivot to companies that are winners of the new global energy paradigm.  These winners are out there in the SGX waiting for investors bold enough to put their capital behind the new energy paradigm.

Fasten your seatbelts, adjust your allocations and let the macro tailwinds do the heavy lifting.

@Tiger_SG  @Tiger_comments  @TigerStars  @TBlive