Broker: UOB Kay Hian
Date of Report: Thursday, 04 September 2025

Malaysia Alpha Picks for September 2025: Top Stocks to Watch Amid Volatility

Market Overview: Navigating the September Effect

August 2025 saw Malaysia’s FBMKLCI index rising 4.1%, with the heavyweight banking sector surging by 5.9%. However, UOB Kay Hian’s Alpha Picks portfolio marginally trailed the benchmark, posting a 2.9% return. As global markets brace for the notorious “September effect” and potential deepening of a summer lull in Western equities, investors are advised to balance defensive stocks with catalyst-driven opportunities.
For September 2025, UOB Kay Hian’s Alpha Picks are:
Alpha IVF
Hume Cement Industries
Inari Amertron
IOI Properties
Northeast Group
PPB Group
RHB Bank
Zetrix AI
These picks are selected based on laggard status with improving fundamentals, thematic plays, and anticipated strong sequential results. External catalysts include Malaysia’s recent trade deal with the US and heightened risk aversion due to macroeconomic trends abroad.

Portfolio Performance and Key Recommendations

Sector Performance Snapshot: August 2025

In-Depth Company Analysis

Alpha IVF: Growth Fueled by Regional Expansion and Influx of China Patients

Multiple growth drivers include increased patient volumes from China (over 70% YoY growth) and new clinics across Indonesia, the Philippines, and Malaysia.
The newly launched Malaysia facility, Alhaya, broke even in its first month and reported a PAT of ~RM3m in its first year.
The stock is trading at 16x PE with a 4.4% dividend yield.
Target price: RM0.35 (20x 2026F PE). Execution of overseas growth is a key re-rating factor.
Share price catalyst: Strong foreign inpatient growth and regional IVF facility launches expected within 3-6 months.

Hume Cement Industries: Riding Infrastructure Catalysts and Dividend Upside

Near-term demand is driven by Penang LRT (RM2.4–3.4b cement demand), Johor RTS, and private sector projects.
Long-term growth anchored by the RM50b MRT3 (RM7.5–10b cement demand).
Strong profits and cash flow allow for a higher dividend outlook: FY25 DPS up to 10 sen, with FY26 forecast at 12 sen (3.7% yield).
Target price: RM4.38 (15x 2026F PE), below the sector’s historic average.
Share price catalyst: Penang LRT commencement within 1-2 quarters.

Inari Amertron: Positioned for Rebound with Strategic Acquisitions

Share price down 35% YTD on smartphone demand concerns, Lumileds acquisition digestion, and US-China trade tension.
Trades at -1SD below seven-year mean PE; value emerging.
Joint acquisition of Lumileds with San’an Optoelectronics for US$239m accelerates expansion into automotive and specialty LED.
Reduces customer concentration risk and smoothens earnings cyclicality.
Target price: RM2.36 (30x FY26F PE); currently at 19.7x ex-cash FY26F PE.
Share price catalyst: Rebound from key US customer launches and successful Lumileds integration (6-9 months).

IOI Properties Group: Interest Rate Tailwinds and Land Monetisation

Falling SORA (from 3.0% to 1.5%) reduces borrowing costs; every 50bp drop saves RM50m/year (8% of FY26 earnings).
Marina View launch (Oct 2025) and industrial land sale in Johor (RM6.8b GDV pipeline) to drive growth.
Target price: RM2.72 (45% RNAV discount, 0.6x FY26F P/B, 22.5x FY26F PE).
Share price catalyst: Land sale completion, Marina View launch, and continued SORA decline in 2H25.

Northeast Group: Resilient Orderbook and Margin Expansion Opportunities

RM32m outstanding orderbook, with more sizeable opportunities pending.
Focus on photonics and telecommunications; limited US tariff exposure.
FY25 3Q core net profit of RM7.6m (+33% qoq), 9MFY25 core net profit at RM15.5m (+27%), beating consensus.
Diversifying into sub-assembly to strengthen margins and customer stickiness.
Share price catalyst: Stronger earnings, new customer wins, and mild impact from tariffs (6-9 months).

PPB Group: Value Emerges After Share Price Decline

1H25 core earnings up 9% YoY; 2H25 outlook even stronger, driven by agribusiness, film, and Wilmar associate.
Wilmar’s Indonesia legal case could cost up to RM580m (RM0.42/share), but PPB has RM1.7bn net cash and dividend payout remains secure (FY24: 42 sen).
Trades at 9x forward PE (1.5SD below 5-year mean), the lowest since the GFC.
Target price: RM15.80.
Share price catalyst: Stronger sequential earnings, Wilmar’s legal resolution, and improved market cap ranking (1-2 quarters).

RHB Bank: Strong Capital, Defensive Yields, and Non-Interest Income Momentum

Net credit cost stable at 19bps in 2Q25, with RM76m set aside for tariff risks.
Non-interest income rebounded (+64% qoq, +42% yoy) due to FVOCI gains and bond yield declines.
CET1 ratio at 16%; projected 65% full cash dividend payout with a 7% yield, among the sector’s highest.
Target price: RM7.30 (0.95x 2025F P/B, 9.5% ROE).
Share price catalyst: Non-interest income growth and lower credit costs (2-3 months).

Zetrix AI: Leading Malaysia’s Digital and AI Infrastructure

Launched Malaysia-China AI Innovation and Cooperation Centre, the flagship China-ASEAN AI Lab.
My Digital ID Superapp integrates multiple government databases for secure SSO login, with monetisation via registration and subscription fees.
ZTrade facilitates cross-border trade document verification with China, processing 15,000 transactions/month; full integration as Malaysia’s National Single Window underway.
Forecasted 4.5–5.0 million Zetrix coin sales in 2024-25 at US$12 each, generating RM200–220m pre-tax profit.
Target price: RM1.52 (15x 2025F PE).
Share price catalyst: My Digital ID SuperApp and World ID official rollout (2-3 quarters).

Valuations Table: Alpha Picks Key Metrics

Key Takeaways for Investors

The Malaysian market remains resilient, with several sectors and select stocks offering attractive upside and strong defensive qualities.
UOB Kay Hian’s September picks focus on a blend of growth and value, highlighting catalysts from infrastructure, digital transformation, diversified technology, and robust financials.
Investors should watch for key project commencements, M&A integrations, new product and platform launches, and macroeconomic shifts for portfolio outperformance.
Stay tuned for updates on these Alpha Picks as Malaysia navigates the September market effect and enters a period ripe with both risks and opportunities.