Friday, July 4th, 2025

Singapore Stock Alpha Picks July 2025: Top Outperformers & Portfolio Strategy by UOB Kay Hian

Broker: UOB Kay Hian
Date of Report: 03 July 2025

Singapore Stock Alpha Picks: UOB Kay Hian’s Top Outperformers and Key Investment Insights for 2H25

UOB Kay Hian’s latest strategy report reveals a robust performance by its Alpha Picks portfolio, consistently beating the Straits Times Index (STI) in June and 2Q25. The portfolio, designed to capture market outperformance through a blend of large and small-mid cap stocks, demonstrated sharp stock selection and timely adjustments ahead of the Monetary Authority of Singapore’s (MAS) anticipated S\$5 billion capital deployment in 2H25. This comprehensive analysis dives deep into UOB Kay Hian’s portfolio moves, detailed company outlooks, and the catalysts investors need to watch.

Alpha Picks Portfolio: Outperformance and Strategic Adjustments

– The Alpha Picks portfolio outperformed the STI, returning 3.5% month-on-month (mom) on an equal-weighted basis in June 2025, surpassing STI’s 1.8% gain by 1.7 percentage points. – For 2Q25, Alpha Picks delivered a 5.0% quarter-on-quarter (qoq) return, beating the STI by 5.2 percentage points. – Small and mid-cap selections such as Centurion (+15.1% mom), Frencken (+7.8% mom), and PropNex (+6.9% mom) were key drivers, with Centurion benefiting from its upcoming REIT listing and Frencken riding semiconductor sector optimism. – Seatrium (-2.0% mom) and China Sunsine (-1.8% mom) underperformed due to weak investor interest in oil-related names. – For July 2025, UMS Integration and CapitaLand Ascendas REIT were added, while STM and Centurion were removed to realize gains of 29.7% and 36.6%, respectively.

Key Portfolio Metrics and Methodology

Return Type 4Q24 1Q25 2Q25 May-25 Jun-25
FSSTI Return 5.6 4.9 -0.2 1.6 1.8
Alpha Picks (Price-weighted) 4.3 -2.5 7.4 4.1 2.0
Alpha Picks (Market cap-weighted) 2.2 -0.3 0.4 1.9 1.3
Alpha Picks (Equal-weighted) -0.1 -0.2 5.0 7.0 3.5

Methodologies:

  • Price-weighted: Equal number of shares per stock, higher price means higher weight.
  • Market cap-weighted: Based on market cap at inception, higher cap means higher weight.
  • Equal-weighted: Same investment in each stock.

Stock Analysis and Investment Highlights

PropNex – BUY

  • Bright property outlook for 2025, with new launches projected at 13,000 units, nearly double 2024’s volume.
  • Strong sales in 4Q24 and 1Q25 (up 192.8% yoy for new homes).
  • Declared a record 2024 dividend of S\$0.0775 per share (140% payout ratio); potential for another special dividend in 1H25.
  • Target price: S\$1.30 (17.6x 2025 PE, 1.5SD above average since 2021).

Share Price Catalysts: Continued strong new launches, price increments for private and HDB flats, special dividends. Timeframe: 3 months.

DFI Retail Group – BUY

  • Executed S\$125m sale of underperforming Singapore food business and exited minority stake in Robinsons Retail (Philippines).
  • Targeting 2% revenue growth and US\$230–270m underlying profit for 2025 (14–34% earnings growth yoy).
  • Growth driven by health & beauty, convenience, and margin optimization.
  • 2025F PE at 14.5x, offering a 25% discount to regional peers; yield at 3.8% vs peers’ 2.8%.
  • Target price: US\$3.50 (20.3x PE, 1SD below 10-year average excluding 2021–23).

Share Price Catalysts: Momentum in convenience segment, high-margin product launches, accretive acquisitions, monetization of the “yuu” platform. Timeframe: 6 months.

ComfortDelGro – BUY

  • UK bus contract renewals to improve margins (10–15% expected), with more impact from 2Q25 onwards.
  • Domestic rail ridership and higher fares from Dec 2024 to boost revenue.
  • Taxi segment supported by full-year contributions from A2B and Addison Lee acquisitions, offsetting China taxi weakness.
  • Decent 2025 dividend yield of 5.8%.
  • Target price: S\$1.71 (16x 2025 PE, five-year average).

Share Price Catalysts: Bus tender wins, taxi commission increases, overseas acquisitions. Timeframe: 6–12 months.

China Sunsine Chemical – BUY

  • Auto sector growth supports demand for rubber accelerators. 1Q25 China auto sales up 11% yoy; NEV sales up 47% yoy.
  • World’s largest rubber accelerator producer with 35% China and 23% global market share (2024).
  • 5.2% dividend yield, strong net cash of Rmb2,074m (70% of market cap).
  • Target price: S\$0.63 (7.5x 2025 PE, 1SD above mean); trades at attractive 1.3x ex-cash 2025 PE.

Share Price Catalysts: New production capacity, higher ASPs, utilization rates. Timeframe: 3–6 months.

Sheng Siong Group – BUY

  • Opened two new stores in 1Q25 (now 77 in Singapore, 672,155 sf). Six new locations secured for 2025, exceeding target.
  • Store area to increase 9% yoy, driving revenue growth.
  • Active tendering for HDB retail spaces, with more than 50,000 BTO flats launching in 2025–27.
  • Target price: S\$1.97 (20x 2025 PE, five-year average).

Share Price Catalysts: More new stores, robust same-store sales, inflation-driven demand. Timeframe: 3–6 months.

iFAST Corporation – BUY

  • AUA hit S\$25.7b (up 22% yoy), led by S\$938m net inflow. Singapore accounts for 70% of group AUA.
  • iFAST Global Bank turned profitable in 1Q25; gross revenue up 105% yoy.
  • Hong Kong’s ePension division ramping up; double-digit revenue and PBT growth targeted for 2026.
  • Target price: S\$7.28 (25x 2025 EPS, 0.5SD below historical mean); currently at 19.7x 2025 PE, a 20% discount to peers.

Share Price Catalysts: Higher AUA, ePension platform progress. Timeframe: 3–6 months.

Food Empire Holdings – BUY

  • Strong demand in SEA (+34% yoy), South Asia (+32% yoy), and CIS (+15% yoy) in 1Q25.
  • Fourth consecutive year of revenue growth (+16% yoy in 1Q25), with improved margins despite inflation and high raw material costs.
  • Capacity expansions in Malaysia (+50% snack output by 3Q25), Kazakhstan (+15% coffee-mix capacity by end-25), and new Vietnam plant by 2028.
  • Target price: S\$1.98 (15x 2025 PE, in line with regional peers).

Share Price Catalysts: Dividend surprises, strong sales volumes, margin improvement. Timeframe: 3–6 months.

Frencken – BUY

  • Moderate revenue growth in 1H25 driven by semiconductors and medical segments.
  • US tariffs have minimal impact (only ~9% of 2024 revenue from US).
  • Diversified global operations enable resilience; no major program disruptions.
  • Target price: S\$1.40 (15x 2025 PE, 1SD above mean).

Share Price Catalysts: Higher factory utilization, improved cost management. Timeframe: 3–6 months.

Valuetronics – BUY

  • FY26 expected to remain profitable despite global trade uncertainty.
  • Vietnam plant expansion (+30% capacity) supports new customer demand.
  • Robust net cash (HK\$1.1b, 65% of market cap) and high dividend payouts (actual: 68%/64%/65% in FY23-FY25).
  • Target price: S\$0.83 (11x FY26 PE, 1SD above historical mean). Trades at 3x FY26 ex-cash PE; 6.8% dividend yield.

Share Price Catalysts: Higher dividend, potential M&As, proactive management. Timeframe: 3–6 months.

UMS Integration – BUY

  • Healthy new customer orders, maintaining 10% qoq revenue growth guidance.
  • Dual-listing on Bursa Malaysia expected late July 2025, aiming to narrow valuation gap (trades at 30% discount to Malaysian peers).
  • Dividend yield of 4% with quarterly payments; Bursa listing opens access for Malaysia institutional funds.
  • Target price: S\$1.32 (17.5x 2026 EPS, 1SD above historical mean).

Share Price Catalysts: Factory utilization, aircraft parts order return to subsidiary JEP Holdings. Timeframe: 3–6 months.

CapitaLand Ascendas REIT (CLAR) – BUY

  • Largest exposure to Singapore business parks and hi-tech buildings (53% of portfolio), with technology, logistics, and life sciences driving 65.1% of monthly rental income.
  • Acquisition of 9 Tai Seng Drive offers 7.1% NPI yield, 30% under-rented, high rental upside, and tight 2% vacancy in Singapore’s data centre market.
  • Target price: S\$4.02 (DDM: 6.5% cost of equity, 2.5% terminal growth).

Share Price Catalysts: Growth across business parks, data centre segment, contributions from development and AEIs. Timeframe: 6–12 months.

Oversea-Chinese Banking Corporation (OCBC) – BUY

  • Announced S\$2.5b capital return via special dividends (10% of net profit for 2024 & 2025) and share buybacks in 2025-26.
  • Board proposed final dividend of 41 S cents and special dividend of 16 S cents for 2H24 (total 101 S cents for 2024).
  • Strategic goals: S\$3b incremental revenue (2023-25), focusing on Asian wealth, cross-border flows, new economy, and sustainable financing.
  • Strong capital: CET-1 CAR at 15.5% (highest among SG banks).
  • Target price: S\$19.30 (1.38x 2025F P/B, Gordon model: 12.1% ROE, 8.75% COE).

Share Price Catalysts: Attractive 2025 dividend yield (5.8%), share buybacks. Timeframe: 6–12 months.

CapitaLand Integrated Commercial Trust (CICT) – BUY

  • Rejuvenation of Tampines Town Central via five-year URA plan; mall repositioning and departmental store reconfiguration to drive rental uplift.
  • Enhancing ION Orchard with tenant mix refresh and premium upgrades; working on tax transparency for ION.
  • Stable cost of debt at 3.4% for 2025.
  • Target price: S\$2.72 (DDM: 6.25% cost of equity, 2.2% terminal growth).

Share Price Catalysts: Resiliency from Singapore portfolio, positive contributions from AEIs in Singapore and Germany. Timeframe: 6–12 months.

Key Valuation Table

Company Ticker Rec Price (S\$) 2 Jul 25 Target Price (S\$) Upside (%) 2024A PE (x) 2025E PE (x) 2026E PE (x) 2025E Yield (%) 2025E ROE (%) Market Cap (S\$m) Price/NAV (x)
CapLand Ascendas Reit CLAR SP BUY 2.73 4.02 47.3 17.8 18.5 17.3 5.6 6.3 12,575.2 1.2
CapLand IntCom T CICT SP BUY 2.23 2.72 22.0 20.5 19.3 18.8 4.9 5.4 16,317.2 1.0
ChinaSunsine CSSC SP BUY 0.565 0.63 11.5 6.9 6.9 6.7 5.1 9.9 538.7 0.7
ComfortDelGro CD SP BUY 1.43 1.71 19.6 14.7 13.6 12.1 6.0 8.7 3,098.5 1.2
DFIRG USD DFI SP BUY 2.81 3.5 24.6 n.a. 16.3 15.2 3.7 33.9 4,846.0 6.1
Food Empire FEH SP BUY 1.82 1.98 8.8 13.7 13.9 12.9 4.1 17.1 961.4 2.4
Frencken FRKN SP BUY 1.27 1.4 10.2 14.6 13.6 12.9 2.2 8.9 542.4 1.2
iFAST IFAST SP BUY 6.73 7.28 8.2 30.1 20.9 18.0 1.5 24.2 2,039.5 6.3
O C B C OCBC SP BUY 16.44 19.3 17.4 9.8 10.6 9.9 6.1 11.6 73,915.2 1.3
PropNex PROP SP BUY 1.12 1.3 16.1 20.3 15.5 14.7 5.4 41.4 828.8 6.7
Sheng Siong SSG SP BUY 1.93 1.97 2.1 21.1 19.3 18.5 3.6 27.0 2,901.8 5.4
UMS UMSH SP BUY 1.36 1.32 (2.9) 23.7 20.4 18.1 3.7 11.2 966.3 2.3
Valuetronics VALUE SP BUY 0.75 0.83 10.7 10.5 10.6 10.1 6.1 11.7 304.3 1.2

Conclusion

UOB Kay Hian’s Alpha Picks portfolio continues to deliver strong results, supported by a blend of blue-chip resilience and high-growth small-mid caps. With strategic adjustments ahead of MAS’s capital injection, and company-specific catalysts lined up for 2H25, investors have a compelling line-up of opportunities to monitor across diverse sectors—from real estate and consumer staples to semiconductors and financial services.

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