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.