Broker: UOB Kay Hian
Date of Report: 30 June 2025

Singapore Mid-Cap Stocks Set for Liquidity Surge: Top Picks, Analysis, and Outlook for 2025

MAS’ S\$5 Billion Equity Market Development Program: A Liquidity Game-Changer

Singapore’s mid-cap market is on the cusp of a transformative liquidity boost, thanks to the Monetary Authority of Singapore’s upcoming S\$5 billion Equity Market Development Program (EMDP). This initiative is designed to significantly enhance market liquidity and attract institutional fund managers to a carefully selected set of mid-cap stocks. The fund deployment, expected to commence as soon as Q4 2025, targets companies with strong fundamentals and robust trading volumes, excluding REITs, with a preference for actively managed strategies.

Screening for Singapore’s Best Mid-Cap Stocks: Criteria and Methodology

UOB Kay Hian conducted a rigorous screening process focusing on mid-cap stocks with market capitalizations between S\$0.5 billion and S\$3.0 billion. A primary filter was average daily trading volume (ADTV) above S\$2 million – a high bar in Singapore’s context – ensuring institutional investors can move in and out of positions efficiently. Additional screening factors included:

• Three- and five-year EPS growth
• Net cash to market capitalization
• Return on Equity (ROE)
• Free float percentage
• Price-Earnings (PE) valuation below 15x for the past five years
• Dividend yield above 3% over five years

This process yielded 16 standout stocks, with further attractive picks emerging when the ADTV threshold was lowered to S\$1 million.

2025 Market Outlook: STI Target and Valuation

UOB Kay Hian maintains a 2025 year-end Straits Times Index (STI) target of 4,054, implying a 2.2% upside from current levels. This is based on a forecast 1.2% earnings growth for index constituents and a forward PE multiple of 13.4x, positioning Singapore as an attractive, defensive market.

Current STI valuations are notably undemanding, trading at:

• 2025F PE of 12.4x
• 2025F P/B of 1.3x
• Dividend yield of approximately 5.5%

These multiples are meaningfully below long-term averages and regional peers.

Mid-Cap Stock Picks with ADTV > S\$2 Million: Company Analysis

Key Company Highlights: Investment Rationale and Outlook

Centurion Corp

• Inelastic demand for core assets, notably in Singapore’s construction sector
• Strong tailwinds from ongoing infrastructure spending
• EPS CAGR: 69% (3Y), 82.2% (5Y)
• ROE: 8.7%, P/B: 1.2x

ComfortDelGro

• Forecast 11% EPS CAGR for 2024-27F
• Expected margin expansion in UK operations and robust M&A pipeline
• Dividend yield: 6.0%, PE (2025F): 13.6x

First Resources

• Production growth guidance of 5% yoy for 2025
• Potential for improved downstream contribution from expanded capacity
• ROE: 16.4%, Dividend yield: 6.9%

iFAST

• Record-high assets under administration
• Strong projected 26.4% earnings CAGR (2025-27F)
• ROE: 24.2%, PE (2025F): 20.5x

Netlink NBN Trust

• Sustainable earnings outlook through 2025-27F
• Healthy balance sheet and projected 2025 yield of 6%
• PE (2025F): 34.2x, ROE: 4.3%

Raffles Medical

• Operational resilience, healthy cash balance
• Dividend yield: 2.8%, ROE: 6.7%

Riverstone Holdings

• Potential recovery in cleanroom glove segment expected in 2H25
• Dividend yield: 8.5%, PE (2025F): 13.9x

Sheng Siong

• Volume growth via six new store openings in 2025
• Consistent, resilient earnings and strong management
• ROE: 27.0%, PE (2025F): 18.7x

SIA Engineering

• Strong net cash position and robust MRO (maintenance, repair, overhaul) demand
• Limited impact from tariff war, recent contract renewal with SIA to support margins
• ROE: 8.7%, PE (2025F): 22.9x

Singapore Post

• Currently undergoing asset sales, may be left as a pure postal company
• Special dividends expected as asset divestments continue
• Dividend yield: 1.0%, PE (2025F): 40.2x

UMS Integration

• Healthy orders from new customer, guiding for 10% qoq revenue growth in 2Q25
• Dual listing in Malaysia targeted for late July 2025
• ROE: 11.2%, PE (2025F): 20.4x

Additional Attractive Mid-Caps with ADTV > S\$1 Million

• Hong Leong Asia (Earnings growth, strong balance sheet, resilient industry exposure)
• Food Empire (Robust earnings and resilience, positive sector dynamics)

Valuation Premiums and Discounts

Comparing valuations to regional and developed market peers:

• Centurion Corp: PE -17%, EV/EBITDA -24% vs. peers
• ComfortDelGro: PE +5%, EV/EBITDA -10% vs. peers
• First Resources: PE -46%, EV/EBITDA -39% vs. peers
• iFAST: PE +47%, EV/EBITDA -41% vs. peers
• Netlink NBN: PE +30%, EV/EBITDA +9% vs. peers
• Other stocks show a mix of premiums and discounts, reflecting sector and growth profiles

Top Large-Cap Picks

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

Singapore’s Most Cash-Rich and Resilient Stocks

Among the top 20 Singapore-listed stocks with the highest net cash, notable names include UMS, iFAST, Sheng Siong, Raffles Medical, Singapore Post, Riverstone, Hong Leong Asia, and SIA Engineering. Several of these are also trading close to their 52-week highs, underlining investor confidence.

Conclusion: Singapore Mid-Caps Ready for a Liquidity-Driven Rerating

The anticipated MAS liquidity injection is poised to transform Singapore’s mid-cap landscape, with a select group of stocks primed for outperformance. Investors should closely monitor the above picks, all of which demonstrate strong fundamentals, robust liquidity, and attractive valuations. The combination of macro tailwinds and company-specific catalysts make Singapore’s mid-cap space one of the most compelling sectors for 2025.