2 Singapore Stocks to Buy for the World Cup 2022
November 25, 2022
The 2022 FIFA World Cup, which is the biggest global sporting event, kicked off on 20 November 2022.
The 32-team football tournament is expected to draw an audience of billions around the world and could be the most watched sporting tournament in history.
For investors, though, how can you benefit from the men’s World Cup 2022 tournament?
With that, here are two Singapore stocks that will benefit from the tournament and which investors can consider buying.
The World Cup tournament, which is held from 20 November-18 December 2022, is expected to boost on-trade sales and consumption of Thai Beverage Public Company Ltd’s (SGX: Y92) products.
This is as football fans flock to neighbouring bars and restaurants to watch the matches, driving up on-trade sales.
Since the reopening of the economy and return of foreign tourists, we should see an improvement in bars and nightclubs, boosted by World Cup festivities.
ThaiBev’s beer business is also gaining momentum in both Thailand and Vietnam.
During its Q3 FY2022, ThaiBev had the second-largest market share at around 40%, closing in on the number one spot.
In Vietnam, its 53.6%-owned subsidiary, SABECO, is also expected to outperform moving into its Q4 FY2022, catching up on its closest competitor.
The brewery player will release its Q4 FY2022 results after the market close on Friday (25 November).
So far, ThaiBev has been able to increase its average selling prices (ASPs) to offset the rising inflation.
The World Cup tournament provides another avenue for ThaiBev to adjust its higher pricing without any negative pushback from customers.
Consensus is also positive on ThaiBev with a 12-month target price of S$0.84, representing potential upside of 36.6%.
Source: Yahoo Finance
On the technical front, our market strategist, Chua Wei Ren, shared that ThaiBev’s initial upside is confirmed after a break above the resistance of the ascending triangle.
After a slight correction at S$0.63, the stock is likely to test the resistance turned support of the ascending triangle at S$0.60.
Source: CGS-CIMB, ProsperUs
StarHub Ltd (SGX: CC3) is also another beneficiary of the World Cup as its promotional bundle comes with a 24-month contract that will tie in new customers.
However, the telecommunications (telco) company has seen a declining margin in its recent financial results.
Its Q3 FY2022’s earnings before interest, tax, depreciation and amortisation (EBITDA) eased 17.5% year-on-year (yoy) as lower margin more than offset its higher revenue.
The management has projected a pick-up in costs for the English Premier League, World Cup content, marketing, and IT transformation in Q4 FY2022.
On a positive note, StarHub has managed to maintain its growth trajectory in Q3 FY2022 as seen by the revenue growth across all its business segments, which include mobile services, fixed enterprise, entertainment and broadband.
The increase in costs during the first nine months of FY2022 was mainly due to the ramp-up in operating expenditure under StarHub’s 5-year transformation programme under DARE+.
While StarHub’s share price has declined by 21.3% from a year ago, most analysts expect the worst is over for the telco company with an average target price of S$1.23, representing an upside of about 15%.
On the technical front, Wei Ren shared that StarHub is finally seeing some initial bullish signs after a prolonged downside.
An ascending triangle is seen in the mix with some accumulation ongoing and should prices break S$1.08, the upside is likely to target S$1.15.
Source: CGS-CIMB, ProsperUs
Taking advantage of the biggest sporting tournament
Investors who are looking for short-term plays should take advantage of the biggest sporting tournament and ride on the momentum trade.
As seen on both the technicals for ThaiBev and StarHub, there are positive upside signals in the near term.
The World Cup also offers an opportunity for companies like ThaiBev to adjust its ASP when it is more acceptable for customers during this festive period.
StarHub will also be able to build on its customers with its bundle promotion that have long-term contracts.
Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.
Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.