UOB Kay Hian
Date of Report: 23 July 2025

Singapore’s Small-Mid Cap Stocks Surge as MAS Unveils S\$1.1 Billion EQDP Initiative: Top Picks and In-Depth Analysis

Introduction: MAS EQDP Launch Sets the Stage for Small-Mid Cap Rally

On 21 July 2025, the Monetary Authority of Singapore (MAS) made a landmark announcement, selecting the first three asset managers for the S\$5 billion Equity Market Development Programme (EQDP) and committing an initial S\$1.1 billion for investment. The move is strategically targeted to invigorate Singapore’s equities market, with a significant focus on small and mid-cap stocks. This decision positions these counters as the biggest winners of the initiative, drawing investor attention to a segment ripe for liquidity and participation upgrades.

Key Takeaways from the MAS EQDP Announcement

• An initial S\$1.1 billion will be managed by newly appointed asset managers under the S\$5 billion EQDP.
• Selection was based on managers’ strategies to improve liquidity and broaden participation in Singapore’s equities, with a substantial commitment to small and mid-cap stocks.
• Further market-boosting measures are in review, including enhanced shareholder engagement, Catalist board reform, improved market-making, reduced board lot sizes, streamlined post-trade processes, and expanded cross-border partnerships.

Top Small-Mid Cap Stocks Poised to Benefit

UOB Kay Hian has identified a group of small and mid-cap companies expected to benefit most from the MAS-driven liquidity and valuation uplift. Below is a detailed analysis of each top pick, with valuation metrics and growth drivers.

Company Analysis: In-Depth Profiles of the Top Picks

Food Empire Holdings (FEH SP)

• Recommendation: BUY | Target Price: S\$2.40 | Upside: 4.8%
• Key Catalysts: Strong earnings growth anticipated in 2025, driven by strategic initiatives led by Ikhlas Capital and passing on higher coffee prices to consumers.
• Financial Highlights (2025): 17.4x PE, 3.0x P/B, 17.2% ROE, 3.3% yield. Market cap stands at US\$944 million.

UMS Holdings (UMSH SP)

• Recommendation: BUY | Target Price: S\$1.73 | Upside: 17.7%
• Key Catalysts: Healthy 2025 earnings growth from ramp-up of new customer orders and a valuation re-rating expected from its dual listing exercise.
• Financial Highlights (2025): 22.1x PE, 2.4x P/B, 11.2% ROE, 3.4% yield. Market cap: US\$815 million.

Frencken Group (FRKN SP)

• Recommendation: BUY | Target Price: S\$1.40 | Upside: (11.9)%
• Key Catalysts: Expected earnings boost from higher semiconductor segment demand. Valuation remains a laggard compared to peers, presenting a potential re-rating opportunity.
• Financial Highlights (2025): 17.1x PE, 1.5x P/B, 8.9% ROE, 1.8% yield. Market cap: US\$530 million.

Valuetronics Holdings (VALUE SP)

• Recommendation: BUY | Target Price: S\$0.83 | Upside: 5.7%
• Key Catalysts: Contributions from new customers, robust dividend yield of 5.9%, and net cash position at about 53% of market cap.
• Financial Highlights (2025): 11.0x PE, 1.3x P/B, 11.7% ROE, 5.9% yield. Market cap: US\$248 million.

Oiltek International (OTEK SP)

• Recommendation: BUY | Target Price: S\$0.86 | Upside: 6.8%
• Key Catalysts: Strong earnings from large contract wins and a dual listing-driven valuation uplift.
• Financial Highlights (2025): 33.5x PE, 14.5x P/B, 41.7% ROE, 3.9% yield. Market cap: US\$269 million.

Propnex (PROP SP)

• Recommendation: BUY | Target Price: S\$1.35 | Upside: (2.2)%
• Key Catalysts: Poised to benefit from positive momentum in the residential property industry.
• Financial Highlights (2025): 19.1x PE, 7.6x P/B, 41.4% ROE, 4.3% yield. Market cap: US\$797 million.

Marco Polo Marine (MPM SP)

• Recommendation: BUY | Target Price: S\$0.066 | Upside: 20.0%
• Key Catalysts: Earnings boost expected from a new fleet of vessels and ongoing shipyard expansion.
• Financial Highlights (2025): 7.9x PE, 1.0x P/B, 13.4% ROE, 3.6% yield. Market cap: US\$161 million.

Lum Chang Creations (LUCC SP)

• Recommendation: BUY | Target Price: S\$0.39 | Upside: 8.3%
• Key Catalysts: Strong earnings outlook for 2025, underpinned by a robust order book and new contract wins in conservation works.
• Financial Highlights (2025): 9.8x PE, 6.9x P/B, 77.4% ROE, 3.0% yield. Market cap: US\$88 million.

CSE Global (CSE SP)

• Recommendation: BUY | Target Price: S\$0.61 | Upside: (2.4)%
• Key Catalysts: Anticipated earnings growth from more contract wins, especially in the data centre segment.
• Financial Highlights (2025): 11.2x PE, 1.6x P/B, 14.1% ROE, 3.8% yield. Market cap: US\$349 million.

Sheng Siong Group (SSG SP)

• Recommendation: BUY | Target Price: S\$1.97 | Upside: (7.1)%
• Key Catalysts: Further revenue growth from record-high store expansions planned for 2025.
• Financial Highlights (2025): 21.2x PE, 5.5x P/B, 27.0% ROE, 3.3% yield. Market cap: US\$2,487 million.

Market Outlook: More Positive Measures Anticipated

MAS and the industry Review Group are actively considering additional initiatives to enhance the vibrancy of Singapore’s equities market. Expected steps include:

• Uplifting companies’ shareholder engagement capabilities
• Strengthening the Catalist board’s appeal to both investors and issuers
• Enhancing market-making and price discovery mechanisms
• Reducing board lot sizes to facilitate broader retail investor participation
• Improving post-trade custody arrangements
• Developing cross-border capital market partnerships

These efforts are poised to further drive liquidity, valuation re-ratings, and long-term growth for Singapore-listed equities.

Conclusion: Small-Mid Caps Take Centre Stage in Singapore’s Growth Story

The MAS’s bold move to channel S\$1.1 billion into small and mid-cap equities marks a pivotal shift in Singapore’s capital markets. With targeted measures aimed at enhancing liquidity, market participation, and investor confidence, the outlook for this segment is exceptionally bright. Investors should closely monitor these top small and mid-cap picks, as they are primed for strong earnings growth, robust dividend yields, and substantial upside potential in the year ahead.

Analyst Contacts

• John Cheong: +65 6590 6623, [email protected]
• Heidi Mo: +65 6590 6630, [email protected]