 • The market darlings are increasingly the quality small and mid-caps, thanks to the emphasis on those categories in the Monetary Authority of Singapore's upcoming deployment of S$5 billion for stocks.
• UOB Kay Hian's new report highlights this, and names its picks (see more below), with a new name being newly-listed Lum Chang Creations.
• Outside of the broker's coverage are still dozens, if not more, of small- and mid-caps that are likely undervalued.
Such names likely include Tai Sin Electric, Banyan Group, Baker Tech, and Nam Cheong.
• Tai Sin Electric will report FY25 results next month, after chalking up 129% profit gain in 1HFY25 which it attributed to its strong business of supplying electrical cables for new construction projects and data centres.
• Banyan Group has had a good run recently on the strong property revenue it is recognising from booming Phuket and it has multi years of project development ahead.
• Then there is Baker Tech, whose net cash is on par with its market cap.
• And Nam Cheong, after a 20% y-o-y rise in core profit in 1QFY25, it is likely to stay on a strong course, thanks to its RM1.7 billion of long-term charters.
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Excerpts from UOB KH report
Analysts: John Cheong & Heidi Mo
Small Mid Cap Stocks Are The Biggest Winners Of MAS’ S$1.1b Distribution
On 21 Jul 25, the MAS announced that it has appointed the first three asset managers under the EQDP and will place S$1.1b with them.
 The funds were selected because they have committed significant allocation to small mid cap stocks.
As a result, small mid cap stocks appear to be the biggest winners of this programme.
Our top picks include Food Empire, UMS, Frencken, Valuetronics, Oiltek, Propnex, Marco Polo Marine, Lum Chang Creations, CSE and Sheng Siong. |
• Expect more positive measures that could drive further valuation re-ratings. The Review Group continues to review other initiatives to enhance Singapore’s equities market.
These include measures to uplift companies’ shareholder engagement capabilities, strengthen the value proposition and attractiveness of Catalist board, enhance market-making mechanisms to promote deeper liquidity and price discovery, reduce board lot sizes to facilitate wider retail investor access, enhance efficiency of post-trade custody arrangements, and develop cross-border partnerships.
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• Our top picks in the small mid cap space include:
a) Food Empire (strong earnings growth for 2025 from passing on of higher coffee prices and more strategic initiatives from Ikhlas Capital,
 John Cheong, analystb) UMS (healthy 2025 earnings growth driven by ramping up of new customer orders and valuation re-rating from dual listing exercise),
c) Frencken (healthy earnings growth from higher demand semiconductor segment and laggard valuation vs peers),
d) Valuetronics (new customers’ contributions, attractive dividend yield of around 5.9%, net cash of around 53% of market cap),
e) Oiltek (strong earnings growth from huge contract wins and valuation re-rating from dual listing exercise),
f) Propnex (beneficiary of tailwinds in the residential property industry),
g) Marco Polo Marine (earnings boost from its new fleet of vessels and shipyard expansion),
h) Lum Chang Creations (strong earnings growth for 2025 from robust orderbook and more contract wins for conservation works),
i) CSE (strong earnings growth for 2025 and more contract wins in the data centre space), and
j) Sheng Siong (more revenue contribution from record-high levels of store expansions in 2025).
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Full report here.
