Broker: UOB Kay Hian
Date of Report: 5 August 2025

Asia-Pacific Markets Outlook: Top Conviction Stock Picks, Earnings Recap, and Sector Trends for August 2025

Introduction

The latest regional market analysis offers a comprehensive view across Greater China, Indonesia, Malaysia, Singapore, and Thailand. Covering strategy shifts, key sector trends, financial performance recaps, and detailed company-level insights, this report is essential reading for investors and analysts seeking actionable intelligence for the second half of 2025.

Greater China Strategy: Alpha Picks and August Conviction Calls

Market Overview

– The Hang Seng Index (HSI) and MSCI China Index climbed 2.9% and 4.5% month-on-month in July, peaking on 24 July before a pullback as investors took profits post-Politburo announcements. – A new 90-day tariff truce between China and the US has temporarily eased trade tensions, supporting a bullish stance on domestic healthcare and IT leaders.

Key Portfolio Actions

– Added to BUY List: JBM Healthcare (2161 HK), Lenovo (992 HK) – Took Profit: CATL (3750 HK), Han’s Laser (002008 CH), KE Holdings (2423 HK), Longfor (960 HK) – Cut Losses: CR Beer (291 HK), Midea Group (000333 CH) – Maintained BUY: Alibaba, Innovent, JD Logistics, Shuanghuan Driveline, Sino Biopharm, Tencent, Tencent Music Entertainment, Xiaomi Corp

Portfolio Performance

– Best performer: Sino Biopharm (+43.0% in July) – 1Q25 Alpha Picks Return (price-weighted): +4.9% – HSI return (YTD): +15.3%

Detailed Company Analysis and Share Catalysts

JBM Healthcare (2161 HK)

– Leading branded healthcare provider and accredited proprietary Chinese medicine manufacturer in Hong Kong. – Iconic products: Ho Chai Kung, Po Chai Pills, Hoi Tin CCMG. – Effective marketing rejuvenates brands; three-year EPS CAGR of 17.9% forecast for FY26-28. – FY26 dividend yield estimated at 7.0% with a 70% payout. – Key catalysts: New marketing campaigns and ex-dividend date (11 August).

JD Logistics (2618 HK)

– Forecasted to sustain a 7.8% core earnings CAGR in 2025-27, driven by volume growth and international expansion. – 95% of revenue from domestic market insulates it from global trade tensions. – Attractive valuation: 11.7x 2025F PE (or 5.7x ex-net cash), cheaper than peers.

Lenovo Group (992 HK)

– Earnings report due 13 August; likely to beat June quarter estimates due to strong PC shipments (+8% vs estimates) and server segment recovery. – Positive outlook for enterprise-driven PC cycle. – Target price HK\$12.10, based on 11.5x FY26F PE.

Shuanghuan Driveline (002472 CH)

– Well-positioned for EV market growth, overseas expansion, and smart actuator penetration. – Gear content per vehicle increased, production efficiency improved. – Expected to sustain double-digit core business growth, supported by demand for robotic reducers. – Target price Rmb41.90 (27.3x 2025F PE).

Sino Biopharm (1177 HK)

– Acquired LaNova Medicines; added robust novel drug pipeline and R&D. – Six new innovative drugs approved in 2024; double-digit revenue growth expected in 2025. – Target price HK\$7.70, SOTP valuation.

Tencent Music Entertainment (1698 HK)

– Focus on ARPPU growth and paid subscriber expansion (5.5% CAGR forecast through 2028). – Merger with Ximalaya to boost long-form audio and user engagement. – Target price HK\$85.00 (28x 2025F PE).

Indonesia Strategy: 1H25 Results Recap

Sector and Corporate Earnings Overview

– 40 out of 49 covered companies reported 1H25 results: 25% exceeded forecasts, 40% in line, 35% below. – Big Four banks: Two below expectations, BBCA in line, BMRI under audit. – Consumer sector mixed; Cisarua Mountain Dairy posted standout results.

Indofood CBP (ICBP IJ): Core Profit In Line with Expectations

– 1H25 revenue up 2% YoY; core profit down 5% YoY to Rp5,367b (49% of full-year estimate). – Margin pressure from higher soft commodity prices and dairy competition. – 2H25 outlook supported by softer CPO prices, domestic sales recovery, and export momentum. – Maintained BUY with a target price of Rp13,800 (14.65x 2025F PE). – Sensitivity: ±5% change in wheat, palm oil, or milk powder prices impacts 2025 core profit by ±5.0%, 2.3%, and 0.9% respectively. – Noodle segment margin: 24.6% (down from 27.2% last year).

Malaysia: Alpha IVF (ALPHA MK) – Scaling Regionally with Proven Execution

– Alpha IVF expands into the Philippines and Indonesia, targeting underserved and niche markets. – China marketing offices (opened Sep 24 and Jan 25) drove 173% YoY growth in Chinese patient revenue, now 20% of group total. – Philippines: Two IVF facilities to open in FY26; expected to break even within the first year. – Forecast 3-year earnings CAGR of 29% (FY25-28F); robust net cash position and dividend payout raised to 85% for FY25. – Maintain BUY with RM0.35 target (20x 2026 PE).

Singapore Tech Manufacturers: Top Picks Amidst MAS EQDP Boost

– Tech manufacturing stocks with strong earnings growth (Frencken, UMS, Valuetronics) are favored as sector rerates on MAS’s S\$5b Equity Market Development Programme. – Frencken (BUY, TP S\$2.08): Healthy 2Q25 earnings growth expected, led by semiconductors and margins. Outperforming on local-for-local strategy. – UMS Integration (BUY, TP S\$1.73): Strong orders from new key customer, ramp-up supports sequential earnings growth. – Valuetronics (BUY, TP S\$0.83): New customer contributions, attractive 5.9% dividend yield, net cash ~53% of market cap.

Other Singapore Tech Coverage

– Venture (HOLD, TP S\$12.01): 2Q25 earnings expected to decline 11% YoY; uncertainty from key customers. – Aztech Global (HOLD, TP S\$0.58): Earnings recovering, but outlook uncertain. – AEM Holdings (SELL, TP S\$1.09): Weak earnings outlook; production ramp-up not visible. – Nanofilm Technologies (SELL, TP S\$0.46): Recovery not in sight; margins remain soft.

Thailand Property Sector: Earnings Recovery Expected, Cautious 2H25 Outlook

– Sector net profit for 2Q25 expected at Bt4.2b (down 22% YoY, up 56% QoQ). – Presales for 1H25 down 20% YoY; project launches down 49% YoY. – Developers face headwinds: high household debt, tight bank lending, and weak economic conditions. – Maintain UNDERWEIGHT on sector.

Bumrungrad Hospital (BH TB): Cautiously Optimistic for 2H25

– Revenue guidance: 3-5% YoY growth in 3Q25. – Middle East patient demand rebounding; Cambodia market faces headwinds. – 2025F PE: 19.2x, Dividend yield: 2.8% – Net margin sustained at 28-30%.

Kasikorn Bank (KBANK TB): Dividend Policy Upgrade and Capital Management

– Dividend payout policy raised to minimum 50% (from 25%), with 50-60% targeted medium term. – Minimum CET1 ratio target set at 15%; Basel III reforms may lower ratio by 1-2% by 2028. – Management guides for potential capital management (buybacks or special dividends) if excess CET1 is available. – 2025 net profit forecast raised 3% (to Bt46.7b), reflecting better asset quality. – 2025F PE: 8.1x, Dividend yield: 6.5%, ROE: 8.1%

Conclusion: Navigating Opportunities in Asia-Pacific Markets

Investors face an environment of selective growth, policy-driven momentum, and sector-specific challenges. The best opportunities for August 2025 lie in Chinese IT and healthcare, Indonesia’s consumer and banking leaders, Malaysia’s regional healthcare expansion, Singapore’s top tech manufacturers, and selective Thai financials. With a rigorous focus on fundamentals, policy tailwinds, and valuation, these conviction calls offer a roadmap for alpha generation in the evolving Asia-Pacific landscape.