A decline in share prices is commonplace; as the late Charlie Munger stated, significant drawdowns are a cost for achieving superior long-term returns.

Even well-established blue-chip companies might experience temporary setbacks due to short-term challenges despite strong underlying fundamentals.

Here, we focus on three such Singaporean blue-chip stocks that have underperformed the Straits Times Index, which has gained nearly 18% year-to-date (YTD), but may bounce back as market sentiment shifts.

SATS Limited

SATS Limited has seen a more than 5% decline YTD.

Global trade disruptions have impacted market sentiment and earnings projections.

SATS has also been integrating its mega acquisition of Worldwide Flight Services (WFS), finalized on 3 April 2024, which has increased its debt levels.

These factors may have contributed to its stock's underperformance.

However, it could be SATS’s time to thrive.

In the first quarter of the fiscal year ending 31 March 2026 (Q1FY2026), SATS’s revenue increased by 10% year-on-year (YoY) to S$1.51 billion.

This revenue growth was coupled with a solid net profit rise of 9.1% YoY to S$70.9 million, driven by record cargo volumes and higher yields.

This continues the robust earnings recovery trend over the past two years, with net income turning from a loss of S$26.5 million in FY2023 to nearly S$244 million for FY2025.

Debt-to-equity remains stable at 1.5 times compared to the previous year.

Since reinstating its dividend for FY2024 (S$0.03 per share), SATS has significantly increased its payout to S$0.10 per share in its latest annual distribution.

With cargo and passenger flows expected to remain strong, management is confident in the immediate prospects of the business.

These positive factors, alongside management's proven ability to execute and grow profits, could propel the stock higher.

Thai Beverage Public Company Limited

Thai Beverage, or ThaiBev, has fallen nearly 14% YTD.

Factors like weaker domestic demand, tariff-induced uncertainty, inflationary costs, and Thailand’s unstable political climate may have influenced its stock’s performance.

How does the business fare?

Revenue for the second quarter of the fiscal year ending 30 September 2025 (2QFY2025) remained relatively flat from the previous year.

Sales volumes increased, with spirits and beer both posting a 2.6% YoY gain, while NAB saw a 0.9% increase over the past year.

Net profit contracted by 11.8% due to underperformance in the Spirits sector, lower share of profit from associates and joint ventures in its non-alcoholic business (NAB), and higher operating costs.

Despite this, ThaiBev has maintained its dividend per share at THB 0.15.

For the past five years, dividends have never been cut, only maintained.

Gearing remains stable at 1.32 times.

Thus, despite mixed results, there are grounds for optimism about ThaiBev's fundamentals given its strong brands in beer (Chang, Saigon Beer) and food portfolios (Oishi Group restaurants, KFC in Thailand).

At its annual meeting in June 2025, ThaiBev management indicated its openness to spinning off and listing its regional beer business.

This move could improve ThaiBev’s valuation as its beer business gains more accurate valuation as a standalone entity, thanks to its strong branding.

ThaiBev trades at a trailing price-to-earnings (P/E) ratio of around 11 times, a significant discount compared to its 10-year average P/E of 16.8 times.

ThaiBev also offers a sustainable dividend yield of 5%.

Any progress in tariff negotiations or moves to monetize its assets could trigger a sharp rally.

Wilmar International Limited

Wilmar International, involved in growing and processing palm oil, grains, and sugar, turning them into everyday food products, specialty fats, biodiesel, and fertilizers, has seen its stock price rise by 5.5% YTD, still trailing the STI.

The overhang of a case involving Indonesian cooking oil export permits, where Wilmar faced a hefty S$725 million fine, may have contributed to its share price’s underperformance.

However, the business itself remains strong.

Revenue for the third quarter of 2025 (3Q2025) was US$19.1 billion, up by 7.4% YoY.

Core net profit surged 71.6% to US$357.2 million, aided by higher volumes in its Food Products segment and Oils and Grains sub-segment under the Feed and Industrial Products segment.

Refining margins also exceeded expectations.

Wilmar's latest interim dividend of S$0.040 per share is slightly lower than the previous year’s S$0.060 per share.

Wilmar has a commendable dividend-paying record, distributing an annual dividend since 2006.

The net gearing ratio for Wilmar is manageable at 0.82 times, with available banking facilities worth US$36.9 billion.

While net income has been declining since 2023, the recent quarter's return to core earnings growth could signal stronger future earnings.

Management is cautiously optimistic that positive business momentum will continue through the year’s end.

With the Indonesian legal issue now resolved, the stock might rally in line with its solid operational performance.

Indicators of a Blue-Chip Recovery

Underperformance compared to the STI does not necessarily make a stock an automatic buy.

Investors should focus on companies with improving fundamentals, strong cash flow, and capable management execution.

Establish a checklist to identify if the company maintains manageable debt levels, cash flow generation capabilities, and potential catalysts.

Historically, blue-chip stocks can rebound strongly after facing temporary headwinds.

The most likely comeback stories are rooted in solid fundamentals:

Share prices as of last Thursday.

Implications for Investors

The volatile mood swings of the market can present buying opportunities for patient, long-term investors.

However, it is crucial to differentiate between companies facing structural issues and those merely experiencing temporary headwinds.

Investors can benefit from a recovery by purchasing quality blue-chip stocks at discounted prices.