UOB Kay Hian
Date of Report: 4 August 2025

Singapore Alpha Stock Picks: July Outperformance, August Opportunities, and Key Catalysts for 2025

UOB Kay Hian’s latest strategy update showcases a stellar performance for its Alpha Picks portfolio in July 2025, achieving a 17.7% month-on-month (mom) gain and outperforming the Straits Times Index (STI) by 12.4 percentage points. As Singapore’s market momentum accelerates, fueled by the MAS S\$5 billion equity market development program and robust IPO activity, investors are presented with refreshed insights and actionable recommendations for August 2025.

Market Overview: Record-Breaking Returns and Small-Mid Cap Surge

July 2025 marked a bullish period for Singapore equities with the STI hitting record highs. The Alpha Picks portfolio’s outperformance was driven by a strategic focus on small and mid-cap companies, which benefited from positive news about Singapore’s S\$5 billion equity market development program (EDQP) and revitalized local bourse sentiment.

• Alpha Picks Portfolio Returns (July 2025):
  • Equal-weighted: +17.7% mom
  • Market cap-weighted: +6.0% mom
  • Price-weighted: +14.6% mom
• FSSTI Return: +5.3% mom
• Alpha Picks outperformed FSSTI 12 out of the past 15 months

The portfolio’s gains were led by non-index stocks, positioning it to benefit from the MAS S\$5 billion capital injection expected in the second half of 2025.

Portfolio Adjustments for August 2025

With the anticipated MAS capital deployment, UOB Kay Hian adds three new small-mid cap stocks:

• Hong Leong Asia (HLA): Favourable construction sector outlook
• Marco Polo Marine (MPM): High charter rates and vessel utilization
• CSE Global (CSE): Robust and expanding orderbook

The portfolio exits iFAST (+40.7% since addition) and Sheng Siong Group (+19.3%) to lock in profits. The current Alpha Picks portfolio now comprises CLAR, CICT, CSSC, CD, CSE, DFI, FEH, FRKN, HLA, MPM, OCBC, PROP, UMSH, and VALUE.

Performance and Returns Table

In-Depth Company Analysis and Catalysts

PropNex: Bullish Outlook with Strong Transaction Volumes

• CEO Ismail Gafoor maintains a bullish outlook despite recent adjustments to Seller’s Stamp Duty (SSD) rates, which are not expected to significantly impact transaction volumes or prices.
• 1H25 revenue is forecast at S\$501 million (+45% yoy, +15% hoh), net profit S\$27 million (+42% yoy, +23% hoh), reflecting robust activity in both public and private residential markets.
• Target price: S\$1.35; 17.6x PE (above historical average).
• Catalysts: Strong new property launches, price increments in private and HDB resale, potential special dividend in 1H25.

DFI Retail: Turnaround and Growth Prospects

• 1H25 underlying profit at US\$105 million (+39% yoy), supported by health & beauty and food divisions and higher associate contributions.
• Balance sheet moved from US\$549 million net debt (1H24) to US\$443 million net cash (1H25).
• Raised 2025 profit guidance to US\$250-270 million (19–34% yoy growth expected).
• Target price: US\$4.30; 22.7x PE (below 10-year average).
• Catalysts: Continued sales momentum, successful launch of high-margin products, accretive acquisitions, monetizing its “yuu” data platform.

ComfortDelGro: Margin Expansion and Dividend Yield

• UK bus margins expected to remain at 10–15% in 2025, with more contract renewals anticipated from 2Q25 onward.
• Domestic rail ridership improvement and fare increase from Dec 2024 to boost rail revenue.
• Taxi business supported by acquisitions (A2B, Addison Lee), offsetting competitive pressures and subdued China rentals.
• Target price: S\$1.71; 16x 2025F PE; 5.8% yield.
• Catalysts: Bus contract wins, taxi commission increases, accretive overseas acquisitions.

Hong Leong Asia: Construction Boom Proxy

• 20% market share in Singapore’s ready-mix concrete (RMC) sector.
• Malaysia construction market uptrend continues; 1Q25 construction work completed at RM42.9 billion (+16.6% yoy).
• Major infrastructure projects (MRT3, Pan Borneo, HSR, Sabah-Sarawak Link) to drive demand.
• Target price: S\$1.93; SOTP-based valuation (BMU at 7x, Diesel Engines at 8x 2025F EV/EBITDA).
• Catalysts: Stronger-than-expected dividends, earnings surprise in engine/materials sales.

Marco Polo Marine: Offshore Wind and Fleet Expansion

• Key deployment: CSOV “MP Wind Archer” for Siemens (Taiwan wind farm) in 2HFY25. Premium short-term charter rates expected to boost earnings.
• Three new Crew Transfer Vessels (CTVs) to be deployed in 3Q25.
• Shipyard recovery expected with new dry dock expanding repair capacity by 25%.
• Strong net cash position (S\$46 million) and NAV per share of S\$0.056.
• Target price: S\$0.066; 9.5x FY25F PE.
• Catalysts: Higher-than-expected charter rates, new contracts, shipyard recovery.

China Sunsine Chemical: Automotive Demand Drives Growth

• World’s largest rubber accelerator producer (117,000 tonnes annual capacity).
• Strong vehicle sales in China (CAAM projects 2025 sales up 4.7% yoy).
• Declared 5.2% dividend yield, net cash RMB2,074 million (70% of market cap).
• Target price: S\$0.63; 7.5x 2025F PE, 1.3x ex-cash PE.
• Catalysts: New capacity production, higher ASPs, utilization rates.

Food Empire Holdings: Instant Coffee Expansion

• Market leader in Russia, Kazakhstan and top 3 in Vietnam.
• New facilities in Vietnam, Kazakhstan, Malaysia to boost output.
• Supplemental REN agreement removes earnings volatility from 3Q25.
• 2024 revenue up 16% yoy, fourth consecutive year of growth.
• Target price: S\$2.40; 17x 2026F PE (+2SD to mean).
• Catalysts: Dividend surprise, volume growth, margin improvement.

CSE Global: Orderbook Strength and US Expansion

• Orderbook at S\$616 million (end-1Q25), strong momentum in communications and automation.
• Chicago Communications acquisition (US\$8.5 million) to boost US presence and earnings.
• Divested US industrial property for US\$29.25 million, generating ~US\$9 million post-tax gain.
• Target price: S\$0.61; 11x 2025F PE; 5.4% yield.
• Catalysts: Large project wins, further accretive M&A.

Frencken: Semiconductor Rebound and Diversification

• 2Q25 earnings forecast at S\$10 million (+10% yoy), driven by semiconductor and medical segments.
• Key customers ASML and Applied Materials posted strong 2Q25 results, signaling robust demand.
• Limited tariff impact (9% of 2024 revenue from US, mostly from Singapore).
• Target price: S\$1.40; 15x 2025F PE (+1SD above mean).
• Catalysts: Factory utilization, cost management improvements.

Valuetronics: Resilient Outlook and Shareholder Focus

• Profitable in FY26 despite global uncertainties; expansion of Vietnam facility by 30% underway.
• Net cash HK\$1.1 billion (~S\$180 million, 65% of market cap); dividend payout historically higher than formal policy.
• Target price: S\$0.83; 11x FY26 PE; 3x ex-cash PE; 6.8% dividend yield.
• Catalysts: Higher dividends, M&A activity, proactive management.

UMS Integration: Semiconductor Upside and Bursa Listing

• New customer orders and stable demand from established clients; 2Q25 earnings forecast at S\$11 million (+12% yoy).
• Dual listing on Bursa Malaysia to unlock valuation re-rating (aiming to close 25% gap vs Malaysian peers).
• Global semiconductor market expected to grow double-digit in 2025, supporting core business and aerospace segment.
• Target price: S\$1.73; 23x 2026F EPS (2SD above mean); ~4% dividend yield.
• Catalysts: Factory utilization, return of aircraft component orders, Bursa valuation uplift.

Capitaland Ascendas REIT: Preferential Tariffs and Data Centre Growth

• Largest exposure to business parks and hi-tech buildings (53% of portfolio), with technology, logistics, and life sciences contributing 65.1% of rental income.
• Acquisition of 9 Tai Seng Drive (Tier III data centre) with 7.1% NPI yield, potential for rental uplift and expansion.
• Target price: S\$4.02 (DDM-based, 6.5% COE, 2.5% terminal growth).
• Catalysts: Growth across business parks, hi-tech, logistics, data centres, and AEIs.

Oversea-Chinese Banking Corp (OCBC): Capital Management and Dividend Upside

• Announced plan to return S\$2.5 billion excess capital via special dividends (10% of net profit for 2024 & 2025) and share buybacks.
• CET-1 CAR at 15.3% (highest among Singapore banks), strong potential for inorganic growth.
• Target price: S\$20.15; 1.44x 2025F P/B.
• Catalysts: Attractive 2025 dividend yield (5.8%), buyback program support.

Capitaland Integrated Commercial Trust: Mall Revamps and Rental Upside

• Tampines Town Central rejuvenation to drive rental uplift; reconfiguration of Isetan space at Tampines Mall into specialty units.
• AEI for ION Orchard to enhance layout and luxury brand positioning, with works staggered through 2025/26.
• Stable cost of debt (3.4%); target price: S\$2.72 (DDM-based).
• Catalysts: Portfolio growth, AEI completions in Singapore and Frankfurt.

Valuation Table (Key Metrics)

Conclusion: Positioning for Outperformance in 2H25

UOB Kay Hian’s Alpha Picks portfolio remains focused on high-growth, small-mid cap opportunities, leveraging sectoral tailwinds, robust orderbooks, and strategic catalysts across Singapore’s equity landscape. With the MAS S\$5 billion capital injection on the horizon, the Alpha Picks continue to offer investors a well-positioned, diversified basket of conviction names for outperformance in the months ahead.