Singapore stock preview: OCBC, Sembcorp Industries, Lendlease

• Oversea-Chinese Banking Corp Ltd (OCBC) share price opened at S$12.25 on Monday (8 August 2022)
• Sembcorp Industries Ltd share price rallied 3.6% to kick start the week
• Lendlease Global Commercial REIT (LREIT) shares fell 1.2% after its latest results
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OCBC (SGX: O39)

OCBC saw group net profit rise 28% year-on-year (YoY) to S$1.48 billion in the second quarter of 2022.

The bank said this was due to ‘robust performance’ across its banking, wealth management and insurance businesses.

Net interest income grew 16% to a new high of S$1.70 billion during the quarter, largely driven by asset growth and margin expansion.

Net interest margin (NIM) rose by 13 basis points (bp) to 1.71%, as asset yields outpaced higher funding costs amid a rapidly rising interest rate environment.

Non-interest income was S$1.18 billion, up 6% from a year ago mainly from higher trading income and life insurance profit.

Operating expenses increased 10% to S$1.25 billion, on the back of higher staff costs (up 10% against the previous year mainly from annual salary increments and a rise in headcount).

Sembcorp Industries (SGX: U96)

Sembcorp Industries recorded a turnover of S$4.8 billion in the first half of 2022 (1H 2022), up 45% from S$3.3 billion recorded a year ago.

The group’s net profit before exceptional items increased 94% to S$490 million, with higher contributions from the renewables and conventional energy segments. Net profit for the renewables segment increased to S$76 million from S$24 million in 1H 2021.

The stronger performance was driven by contributions from SDIC New Energy and Shenzhen Huiyang New Energy in China in January 2022 and June 2022 respectively. Wind assets in India and solar operations in Singapore also performed better.

The board of directors announced an interim dividend of S$0.04 per ordinary share (up from S$0.02 a share in 1H 2021), which will be paid on 23 August 2022.

Lendlease Global Commercial REIT (SGX: JYEU)

LREIT’s distributable income rose 55.6% YoY to S$42.9 million in the second half of FY2022 (2H FY2022). This translated to a distribution of S$0.0245 per unit.

For FY2022, distributable income increased 29.7% YoY to S$71.5 million, equivalent to a distribution of S$0.0485 per unit.

Gross revenue for 2H FY2022 was S$62.5 million, up 68.6% from a year ago. This was mainly attributed to the accretive acquisition of Jem and better operating performance at 313@somerset.

This led to a higher net property income (NPI) of S$45.9 million for 2H FY2022. For FY2022, gross revenue and NPI increased 29.3% and 32.7% YoY to S$101.7 million and S$75.5 million respectively.

Property expenses in FY2022 amounted to S$26.2 million, 20.3% higher compared with FY2021. This was primarily due to the acquisition of Jem in FY2022.

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