These are the 10 stocks that could be the ‘biggest winners’ of MAS’s $1.1 bil distribution, says UOBKH

UOB Kay Hian analysts John Cheong and Heidi Mo have identified 10 stocks that could benefit from the $1.1 billion distribution by the Monetary Authority of Singapore (MAS) so far.

The MAS, on July 21, announced that it appointed Avanda Investment Management, Fullerton Fund Management and JP Morgan Asset Management as the first batch of asset managers that will launch their fund strategies under the Equity Market Development Programme (EQDP). Of the $5 billion EQDP fund, the MAS said it will place a total of $1.1 billion with the three firms.

In their July 23 report, Cheong and Mo note that the funds were chosen for their commitment to allocate the monies to small- and mid-cap stocks.

Among the space, the analysts like Food Empire, UMS, Frencken, Valuetronics, Oiltek, PropNex, Marco Polo Marine, Lum Chang Creations, CSE Global and Sheng Siong Group for various reasons.

Food Empire was chosen for its strong earnings growth for FY2025 due to the passing on of coffee prices and more strategic initiatives from Ikhlas Capital, while the analysts like UMS for its healthy FY2025 earnings growth stemming from new customer orders and re-rating in valuations from its dual-listing exercise. UMS’s secondary listing on the Bursa Malaysia is set to debut on Aug 1.

At the same time, Frencken was chosen, also for its healthy earnings growth on the back of higher demand from the semiconductor segment and laggard valuation versus its peers. Fellow tech play, Valuetronics is preferred for its new customers’ contributions, attractive dividend yield of around 5.9% and net cash of around 53% of its market cap.

Oiltek, which transferred to the Mainboard in June and is also seeking a secondary listing on the Bursa, is preferred for its strong earnings growth from huge contract wins and a valuation re-rating from the dual-listing exercise. PropNex, Singapore’s largest property agency, is seen as a beneficiary of the tailwinds in the residential property industry, while Marco Polo Marine is likely to derive a boost in its earnings from its new fleet of vessels and shipyard expansion.

Newly-listed Lum Chang Creations is also lauded for its strong earnings growth in FY2025 from its “robust” orderbook and more contract wins for conservation works.

CSE Global is also liked for its potential earnings growth this year and contract wins in the data centre space.

Finally, the analysts selected Sheng Siong as one of their top picks for the group’s higher revenue contribution from its record-high levels of store expansions in 2025.

All 10 stocks have “buy” calls from UOB Kay Hian.

Of the list, shares in Frencken, PropNex, CSE Global and Sheng Siong are expected to see downsides based on their target prices of $1.40, $1.35, 61 cents and $1.97 respectively.

As at July 25, shares in Food Empire, which are trading at $2.43 as at 10.48am on July 25, have outperformed the analysts’ target price of $2.40. Similarly, shares in Oiltek, which are trading at 89.5 cents as at the same time, have gone past UOB Kay Hian’s target price of 86 cents. Shares in Lum Chang Creations have hit UOB Kay Hian’s target price of 39 cents as at 10.48am on July 25.

Meanwhile, the analysts have a target price of $1.73 for UMS, 83 cents for Valuetronics and 6.6 cents for Marco Polo Marine.

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