Broker: UOB Kay Hian
Date of Report: 27 May 2025

Singapore and Hong Kong Market Outlook 2025: Top Stock Picks, Sector Insights, and Key Strategies for Investors

US Market Holiday Leaves Asia in Focus

US markets remained closed on Monday, shifting investor attention squarely onto Asian markets. The Singapore and Hong Kong markets continued to see active trading, with key indices and stocks showing movement ahead of major economic and corporate developments.

Key Market Performance: Indices and Sector Overview

Singapore Market Recap: Active Stocks, Gainers & Losers

The Straits Times Index (STI) closed 6.82 points lower at 3,875.60. Market breadth remained negative with 220 gainers against 268 losers, and a total trading value of S\$751.7m. Key movements included:

• DBS: -0.4%
• Yangzijiang Shipbuilding: -1.0%
• Singapore Telecommunications: -1.0%
• Thai Beverage: -1.1%
• Rex International: +0.8%

The FTSE ST Mid Cap and Small Cap indices both rose 0.1%.

Top Trading Turnover (Singapore)

Top Gainers (Singapore)

• SATS: +2.3%, S\$3.05
• Stoneweg European Real Estate: +2.0%, S\$1.50
• Frasers Logistics & Commercial: +1.9%, S\$0.80
• Jardine Matheson Holdings: +1.9%, S\$45.89
• Mapletree Logistics Trust: +1.9%, S\$1.10

Top Losers (Singapore)

• Yangzijiang Shipbuilding: -5.0%, S\$11.52
• Tianjin Pharmaceutical Da: -4.7%, S\$2.22
• Hutchison Port Holdings Trust: -4.7%, S\$0.21
• Mandarin Oriental Intl: -3.0%, S\$1.93
• Pacific Century Region Devel: -2.6%, S\$0.37

Hong Kong Market Highlights: Top Movers

Top Trading Turnover (Hong Kong)

Top Gainers (Hong Kong)

• Sunny Optical Tech: +14.8%, HK\$73.95
• Byd Electronic Intl: +13.8%, HK\$37.95
• Xiaomi Corp-Class B: +6.5%, HK\$19.10
• Alibaba Health Information: +5.8%, HK\$5.27
• China Eastern Airlines Co-H: +5.2%, HK\$2.62

Top Losers (Hong Kong)

• Giant Biogene Holding: -5.7%, HK\$76.70
• Chongqing Rural Commercial-H: -4.1%, HK\$6.62
• Zhongsheng Group Holdings: -2.2%, HK\$15.02
• China Tower Corp Ltd-H: -2.1%, HK\$0.93
• Wuxi Biologics Cayman Inc: -2.1%, HK\$14.12

Singapore Traders’ Corner: Technical Analysis and Trade Ideas

Medtecs International Corp (MED SP)

• Trading Buy Range: S\$0.132-0.133
• Last Price: S\$0.133
• Target Price: S\$0.152
• Stop: S\$0.128
• Price is trading above the cloud, indicating an intact uptrend.
• MACD remains strong and bullish.
• Potential for price to test S\$0.152 within 1-2 weeks.
• Initiate trade if stock hits entry range within three trading days.

UMS Holdings (UMSH SP)

• Trading Buy Range: S\$1.14-1.15
• Last Price: S\$1.15
• Target Price: S\$1.28
• Stop: S\$1.11
• Strong bullish outlook as price trades far above the cloud.
• MACD remains bullish; price has stayed above resistance-turned-support.
• Potential for price to reach S\$1.28 in 1-2 weeks.
• Institutional research target price: S\$1.32 (Fundamental BUY).

Company Results and Analysis

Meituan (3690 HK): 1Q25 Earnings Beat, Margin Pressures Ahead

Meituan delivered 1Q25 results in line with expectations. Total revenue grew 18% year-on-year to Rmb86.6b. Non-IFRS net profit reached Rmb10.9b, with net margin expanding 2 ppt to 12.6%, exceeding consensus by 13%. However, competitive pressures in the food delivery (FD) business are expected to cause margin pressure for the remainder of 2025.

Segment Highlights:

• Core Local Commerce (CLC): Revenue up 18% yoy. Commission growth stable at 24% yoy. FD order volume up 10% daily; revenue outpaced order growth due to advertising gains and reduced subsidies. Instashopping order volume grew over 30% yoy, with 1% GTV margin on improved efficiency and scale.
• In-store hotel and travel (ISHT): Total GTV surged 30%+, with mid-40% growth for in-store segment. Revenue rose 20% yoy, with AOV declines moderating top-line growth.
• New Initiatives and Others (NIO): Revenue up 19% yoy. Operating loss narrowed by 17.5% yoy to Rmb2.3b, with margin improvement to -10.2% on efficiency efforts.

Key Financials (Meituan)

Stock Impact and Forward Guidance

• 2Q25/2025 revenue forecasted to grow 16% yoy, with CLC expanding 18%/16% yoy, but CLC EBIT to see a 20% decline in 2Q25 before rebounding 13% in 2025.
• On-demand order volume growth expected to remain in low teens for 2Q25; CLC revenue growth guided at 9-11% yoy due to softer advertising and delivery income.
• Meituan Instashopping expected to maintain strong order/revenue momentum in 2Q25, aided by 5.28 and 6.18 promotions. Losses to continue narrowing.
• Keeta, Meituan’s overseas initiative, is active in five cities with plans to expand to 50 in 2025. Timelines for further international expansion remain uncertain.
• Sensitivity analysis suggests 2025 EPS could vary -32% to +36% depending on take rate and user incentive rates.
• Target price revised down to HK\$140.00 (HOLD), implying 14.6x 2025F PE. Key risks: macro conditions, competition from Douyin/Ele.me, and slower-than-expected profitability in new initiatives.

Singapore Strategy Update: Tariff Turbulence Subsides, S\$5b Blitz Set to Boost Market

Singapore’s market outlook has become more bullish as the US eases off tariff threats and the Monetary Authority of Singapore (MAS) prepares to inject S\$5b into the equity market via the Equity Market Development Programme (EQDP). This initiative is expected to boost non-index mid caps, providing fresh momentum for select stocks.

Key Stocks to Watch: Small and Mid-Cap Picks

Highlights: Why These Stocks?

• Centurion: Stable demand, construction spending tailwinds.
• ChinaSunsine: Global rubber accelerator leader, net cash at 72% of market cap.
• ComfortDelGro: Defensive, overseas growth, 6.1% yield.
• CSE Global: Revenue growth to 2027, strong S\$616m orderbook.
• Food Empire: Cost control, Vietnam/Central Asia expansion.
• Frencken: Stable to higher revenue, improved semiconductor outlook.
• Hong Leong Asia: Construction demand in Singapore/Malaysia, profit growth.
• Oiltek: Asset-light, high ROE, sustainable aviation fuel exposure.
• PropNex: Strong property outlook, special dividends expected.
• Sheng Siong: New store openings, robust management.
• SIA Engineering: Strong MRO demand, minimal tariff war impact, net cash at 23% of market cap.
• Valuetronics: AI boom exposure, Vietnam growth, net cash >73% of market cap.

MAS Equity Market Development Programme (EQDP): Catalyzing Singapore’s Market

• S\$5b to be allocated to asset managers to enhance market liquidity and support the fund management ecosystem.
• Proposals due by 30 May; fund manager shortlist expected in 3Q25 and fund deployment likely in 4Q25.
• Focus will be on non-index Singapore stocks with preference for actively managed strategies; REITs are not preferred.
• STI target for end-2025 raised to 4,054 (from 3,720), implying about 5% upside from current levels, based on 1.2% earnings growth and a PE of 13.4x.
• Key hurdles: Absence of market makers and need for continued, not one-off, liquidity support.

Top Large-Cap Picks for 2025

• CapitaLand Ascott REIT
• CapitaLand Integrated Commercial Trust
• First Resources
• Keppel Ltd
• Oversea-Chinese Banking Corp
• SATS
• Sea Ltd
• Sembcorp Industries
• Singapore Telecommunications
• Yangzijiang Shipbuilding

Valuation: STI Remains Attractive vs Regional Peers

• STI trades at 2025F PE and P/B of 12.2x and 1.3x, with a yield over 5.5%.
• These multiples are discounted versus long-term averages and regional peers, providing a value opportunity.

Conclusion

With tariff turbulence abating and major liquidity infusions set to benefit Singapore’s non-index stocks, the market outlook for 2H25 is robust. Investors are encouraged to focus on high-quality, cash-rich small and mid-cap names, alongside selected large-cap stalwarts. Hong Kong’s Meituan remains a hold as competitive headwinds persist, despite a strong first quarter. The coming months will be pivotal as policy-driven liquidity and strategic sector rotation reshape opportunities in both Singapore and Hong Kong.