Broker: UOB Kay Hian
Date of Report: 3 June 2025

Singapore Stock Market Alpha Picks: Detailed Analysis and Top Opportunities for June 2025

Singapore Market Overview: Outperformance Amid Renewed Optimism

The Singapore stock market rallied in May 2025, driven by improved global investor sentiment, thawing geopolitical tensions, and robust corporate earnings. The Straits Times Index (STI) climbed 1.6% month-on-month (mom), but UOB Kay Hian’s Alpha Picks portfolio surged ahead, delivering a 7.0% mom gain on an equal-weighted basis—outperforming the STI by 5.4 percentage points. On a market cap-weighted basis, the Alpha Picks portfolio rose 1.9% mom, still beating the STI by 0.3 points.

With nine out of thirteen portfolio holdings being non-index stocks, the portfolio is strategically positioned for the anticipated S\$5 billion capital injection by the Monetary Authority of Singapore (MAS) in 2H25. The portfolio’s outperformance was led by strong gains in small- and mid-cap stocks, particularly SIA Engineering (+20.5% mom), Centurion (+17.5% mom), and Oiltek (+16.9% mom). Conversely, PropNex (-3.8% mom) and CapitaLand Integrated Commercial Trust (-2.8% mom) lagged due to weak investor interest in REITs and property counters.

Portfolio Rebalancing: June 2025 Additions and Removals

In anticipation of MAS’ capital deployment, UOB Kay Hian has rebalanced its Alpha Picks portfolio for June. The following mid-cap stalwarts have been added: ComfortDelGro, China Sunsine, Frencken, iFAST, and Food Empire Holdings. Meanwhile, Sembcorp Industries (after a stellar 123% run), Oiltek, SIA Engineering, and Marco Polo Marine are removed due to a lack of imminent share price catalysts.

Alpha Picks Portfolio: Performance Snapshot

Stock-by-Stock Analysis and Insights

Centurion Corporation: Resilient Growth Backed by Infrastructure and Student Accommodation

• Business Model: Balanced exposure to Purpose-Built Workers’ Accommodation (PBWA) in Singapore and Purpose-Built Student Accommodation (PBSA) in Australia and the UK insulates revenues from global shocks.
• Revenue Drivers: Major construction projects such as Marina Bay Sands (S\$10.7b), Resorts World Sentosa (S\$6.8b), Changi Airport Terminal 5 (S\$11.0b), and North-South Corridor (S\$7.5b) support sustained demand for PBWA assets. 70% of 2024 revenue came from Singapore PBWA.
• Valuation: Target price S\$1.48, based on 10.6x PE (1SD above long-term average, excluding COVID-affected 2019).
• Catalysts: Proposed REIT spin-off, successful capital recycling, JV expansions, and dividend-in-specie potential.

PropNex: Riding the Wave of New Launches and Dividend Potential

• Market Outlook: 2025 will see approximately 13,000 new property launches—almost double 2024’s volume. Successful launches in 1Q25 (The Orie, Lentor Central Residences) point to strong demand.
• Financials: 1Q25 new home sales surged 192.8% year-on-year. A final dividend of S\$0.03/share and a special dividend of S\$0.025/share were declared for 2024, marking a 140% payout ratio—highest since PropNex’s listing.
• Valuation: Target price S\$1.30, pegged to 17.6x PE (1.5SD above average since 2021).
• Catalysts: Continued strong property launches, potential for another special dividend in 1H25.

Seatrium: Contract Wins and Margin Recovery Drive Optimism

• Key Contracts: MOU with BP for a new FPU, contract with Penta-Ocean for a heavy lift vessel for Japan, and jack-up rig equipment supply for the Middle East.
• Order Book: S\$21.3b, with successful delivery of ExxonMobil’s FPSO and 45 repair/upgrade projects in 1Q25.
• Profitability: Management targets higher gross margins for 2025, with S\$200m procurement and S\$300m synergy savings planned.
• Valuation: Target price S\$2.96, based on 1.5x P/B (1.5SD above 5-year average).
• Catalysts: New orders, resolution of MAS/CAD investigations.

DFI Retail Group Holdings: Streamlining Portfolio for Earnings Growth

• Strategic Sale: Disposing S\$125m of Singapore food businesses to Macrovalue, removing low-margin operations.
• Outlook: 2025 revenue growth guidance of 2%; projected underlying profit US\$230m–270m (+14–34%). Growth to be driven by health & beauty, convenience, and product mix optimization.
• Valuation: Target price US\$2.80, at 16.3x PE (1SD below historical average). Trades at 12.6x 2025F PE, a 37% discount to peers.
• Catalysts: Sales momentum in convenience segment, higher-margin product launches, and monetization of the “yuu” platform.

ComfortDelGro Corporation: Margin Expansion and Global Diversification

• Public Transport: UK bus contract renewals expected to deliver 10–15% margins in 2025; improving domestic rail ridership and higher fares support Singapore operations.
• Taxi Segment: Competition from GrabCab and subdued China rentals offset by full-year contributions from A2B and Addison Lee acquisitions.
• Valuation: Target price S\$1.71, based on 16x 2025F PE (5-year average). Dividend yield of 5.8% for 2025.
• Catalysts: Bus contract wins, higher taxi commissions, and overseas acquisitions.

China Sunsine Chemical: Market Leader in Rubber Accelerators

• Industry Growth: 1Q25 auto sales in China +11% yoy, NEV sales +47% yoy. CAAM projects 2025 vehicle sales at 32.9m (+4.7% yoy).
• Scale Advantage: Largest global producer of rubber accelerators (117,000 tonnes capacity). 35% market share in China, 23% globally.
• Financial Strength: Net cash of Rmb2,074m (S\$0.40/share), 5.2% dividend yield.
• Valuation: Target price S\$0.63, based on 7.5x 2025F PE (1SD above mean). Trades at 1.3x ex-cash 2025F PE.
• Catalysts: New capacity launches, higher ASPs, increased utilization rates.

Sheng Siong Group: Aggressive Store Expansion Fuels Growth

• Store Network: Opened 2 new stores in 1Q25 (77 total, 672,155sf, +2% yoy). Secured 6 new locations for 2025, with 4 from HDB tenders and 2 private retail sites.
• Expansion Pipeline: Expects 9 new stores in 2025 (revised up from 5), boosting retail area by 9% yoy.
• Valuation: Target price S\$1.97, based on 20x 2025F PE (5-year average).
• Catalysts: Same-store sales growth, higher demand from inflationary pressures.

iFAST Corporation: Record AUA and Global Expansion

• Key Metrics: Assets under administration (AUA) reached S\$25.7b (+22% yoy, +3% qoq) as of Mar 2025; net inflows S\$938m.
• iFAST Global Bank (iGB): 1Q25 profit of S\$1m (vs. S\$2.3m loss in 1Q24), with 105% yoy gross revenue surge.
• Hong Kong: 1Q25 revenue +13% yoy; AUA +24% yoy to S\$3.1b. ePension business expected to contribute more significantly in 2H25 and beyond.
• Valuation: Target price S\$7.28, based on 25x 2025 EPS (0.5SD below historical mean). 3-year earnings CAGR of 26.4% (2025-27).
• Catalysts: ePension ramp-up, sustained AUA growth.

Food Empire Holdings: Consistent Growth and Expansion Momentum

• Segment Performance: 1Q25 revenue growth led by Southeast Asia (+34% yoy), South Asia (+32% yoy), and CIS (+15% yoy). Strong demand for instant coffee, with Vietnam and Kazakhstan showing standout performance.
• Expansion: Malaysia snack facility (+50% output by 3Q25), new Kazakhstan coffee-mix plant (+15% capacity by end-25), and Vietnam freeze-dried coffee plant (by 2028).
• Valuation: Target price S\$1.98, pegged at 15x 2025F PE (in line with regional peers).
• Catalysts: Potential dividend surprises, robust sales across segments, margin improvements.

Frencken: Diversified Exposure and Semiconductor Cycle Recovery

• Outlook: Moderate 1H25 revenue growth expected from semiconductor and medical segments; analytical life sciences and industrial automation stable. Automotive sector remains soft.
• Tariff Impact: Minimal exposure (<9% of 2024 revenue to US), with most shipments from Singapore.
• Strategy: “Global Reach, Local Expertise” enables local-for-local manufacturing and rapid adaptation to global trade shifts.
• Valuation: Target price S\$1.40, based on 15x 2025F PE (1SD above mean PE).
• Catalysts: Higher-than-expected factory utilization, cost management.

Valuetronics: Resilient Profits and Capacity Expansion

• FY26 Outlook: Expected to remain profitable despite global uncertainties. Vietnam facility capacity to increase by 30% with the addition of a fourth floor.
• Revenue Streams: Consumer electronics revenue may decline as a legacy customer phases out, partially offset by growth from an entertainment-focused client. Industrial and commercial electronics outlook is mixed.
• Financial Strength: Net cash of HK\$1.1b (~S\$180m), representing 65% of market cap. Actual dividend payouts have consistently exceeded formal policy.
• Valuation: Target price S\$0.83, based on 11x FY26F PE (1SD above historical mean), trades at 3x ex-cash PE, and offers a 6.8% FY26 dividend yield.
• Catalysts: Higher dividends, M&A activity, proactive management.

Oversea-Chinese Banking Corporation (OCBC): Capital Efficiency and Dividend Play

• Capital Return: S\$2.5b to be returned to shareholders over two years via special dividends (10% of net profit for 2024/2025) and share buybacks.
• Growth Initiatives: Targeting incremental S\$3b in revenue (2023–25) through cross-border trade, Asian wealth management, new economy, and sustainable financing.
• Balance Sheet: CET-1 CAR of 15.3% as of 4Q24—the highest among Singapore banks.
• Valuation: Target price S\$16.90, based on 1.57x 2025F P/B.
• Catalysts: Attractive 2025 dividend yield of 5.8%, share buybacks.

CapitaLand Integrated Commercial Trust (CICT): Core Singapore Focus and AEI Upside

• Portfolio Strength: Positive rental reversion for retail (+8.8%) and office (+11.1%) in 2024. ION Orchard occupancy improved to 98% in 4Q24. Downtown malls benefit from tourism recovery.
• Asset Enhancements: AEI at IMM Building (phases 3 and 4) to complete in 3Q25; Gallileo handover to ECB in 2H25. Plans to enhance Plaza Singapura and The Atrium at Dhoby Ghaut MRT are under evaluation.
• Debt Costs: Stable average debt cost at 3.6% in 4Q24, expected to remain below 4% in 2025.
• Valuation: Target price S\$2.37, based on a dividend discount model.
• Catalysts: Completion of AEIs, continued recovery in Singapore tourism and retail.

Valuation Table: Key Metrics for Alpha Picks

Conclusion: Strategic Stock Selection to Capture Singapore’s Growth

UOB Kay Hian’s Alpha Picks for June 2025 reflect a diversified strategy targeting resilient, high-growth, and attractively valued Singapore companies. The blend of sector leaders, defensive plays, and growth stocks offers investors an opportunity to outperform the broader market, particularly in anticipation of MAS’s capital injection. Investors are encouraged to consider these expertly-curated picks for robust portfolio growth in the months ahead.