Hunting for small-to-mid-cap Singapore stocks that could ride the wave of the MAS’s Equity Market Development Programme?
A DBS Research report on 22 May said: "Market chatter suggests MAS is close to shortlisting strategies for its SGD 5bn Equity Market Development Programme (EQDP), aimed at boosting local equity participation." The Business Times reported today (26 May) that MAS will shortlist fund managers by 3Q2025. What might the fund managers buy? DBS has zeroed in on eight stocks that check at least three boxes from a five-factor screen:
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The DBS Five-Factor Screen
|
Stock |
FY24 net cash >15% of mkt cap |
>4% div yield |
>10% FY25F EPS growth |
Fwd PE below 4-yr avg |
>50% FY24 revenues from SG |
|
Comfort |
Y |
Y |
Y |
Y |
|
|
Hong Leong Asia |
Y |
Y |
Y |
||
|
SIA Engineering |
Y |
Y |
Y |
Y |
|
|
IFAST |
Y |
Y |
Y |
||
|
UMS |
Y |
Y |
Y |
||
|
Frencken |
Y |
Y |
Y |
||
|
Raffles |
Y |
Y |
Y |
||
|
PropNex |
Y |
Y |
Y |
Y |
Three thematic groups emerged in the DBS report:
- Overlooked Industrials: ComfortDelGro, Hong Leong Asia, SIA Engineering
- Structural Growth Drivers: UMS, Frencken, IFAST
- Domestic Economic Proxies: Raffles Medical, PropNex
| Who’s Who and What’s New |
ComfortDelGro
ComfortDelGro is a major transport operator in Singapore, with ongoing efforts to modernize its fleet, including the adoption of electric vehicles and digital ticketing systems.
Its defensive business model and local focus make it a potential beneficiary of increased domestic investor interest.
Hong Leong Asia
Hong Leong Asia had robust net cash of about S$500 million as at end-2024.
The group operates primarily in building materials and powertrain solutions, with significant exposure to the Singapore and China markets.
Hong Leong Asia's "powertrain solutions" segment refers to its 48.7% stake in New York-listed China Yuchai. Among its products are power generators which are enjoying surging demand in China from the increasing number of data centres catering to the growth of AI business and semiconductor industry.
SIA Engineering
As a leading provider of aircraft maintenance, repair, and overhaul (MRO) services, it stands to benefit from the recovery in air travel and increased flight activity in the region.
The company’s established relationships with airlines and its focus on operational efficiency support its positive outlook.
iFAST
iFAST is included for its solid net cash position and strong earnings growth.
As a digital wealth management platform, iFAST continues to expand its assets under administration and invest in digital infrastructure.
The company has benefited from growing investor interest in digital investment solutions and regional expansion, including new partnerships and platform enhancements.
UMS Integration
UMS Integration is identified as a beneficiary of sustained demand in the semiconductor sector.
The company provides precision engineering and manufacturing services, with recent momentum driven by strong order flows from semiconductor customers and capacity expansion in Malaysia and Singapore.
Both its major global semiconductor customers (unnamed) have issued positive 2025 outlooks, riding on the rising AI investment and demand.
Frencken
With a recovery in the semiconductor cycle, Frencken offers a growth story via its main business in advanced manufacturing for the semiconductor and industrial automation sectors.
The company has expanded its production capacity and benefited from global demand for semiconductors and electronics.
Raffles Medical
Raffles Medical focuses on healthcare services mainly in Singapore.
The company has expanded its clinic network and invested in digital health platforms, positioning itself to benefit from rising healthcare demand and increased local investor participation.
PropNex
PropNex, Singapore’s largest listed real estate agency, is also a domestic economic proxy riding on a big wave of new property launches this year.
The company has invested in digital tools and training for its agents, maintaining a strong market share in residential property transactions.
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Why It Matters Large-caps may hog headlines, but these smaller, under-owned names could see the biggest bumps once institutional money starts hunting for yield and growth. |
