In the Singapore stock market, we can observe numerous cases of market mispricing that create arbitrage opportunities for investors. This phenomenon occurs in several instances where the value of listed subsidiaries or associates is not properly reflected in the valuations of their separately listed parent entities.
Here are examples of stock mispricing that investors could take a closer look at:
Koh Brothers Group, Koh Brothers Eco, Oiltek International
When Oiltek International (SGX:HQU
) listed here on the Singapore Exchange back in March 2022, it was yet another of those all-placement offerings that shut out retail investors, and largely kept under the radar of the market.
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Yet, two years after the listing, the company began to impress with a series of new orders, which sent its share price on a steady climb. In 2024, the share price gained 385% and last year, it etched up another 105%. Barely one quarter this year, when most investors would have thought this counter is taking a breather, its strongest gain was to come.
On April 6, Oiltek announced what was its largest contract, by far, to date of some US$350 million ($446 million). In the days that followed, Oiltek’s share price surged, as Paul Chew of PhillipCapital and Heidi Mo of UOB Kay Hian heaved their target prices up from $1.18 to $2.72 and from $1.05 to $2.78 respectively. Oiltek shares closed at $1.92 on April 8, extending a gain of 174% year to date, and valuing the company at $823.7 million.
Oiltek is 68.1% controlled by another listed company, Koh Brothers Eco Engineering (SGX:5HV) , which is valued at $560.9 million as of April 8, versus KBE’s entire market cap of $326.9. KBE, in turn, is 54.8% held by Koh Brothers Group (SGX:K75) — a stake valued at $179.1 million, versus KBG’s total market cap of $146.4 million. Both KBE and KBG shares enjoyed their own run-ups in tandem with Oiltek’s contract win news but for some investors, but clearly, the value of KBE and KBG are not properly reflected — especially seen against the backdrop of an overall revival in investors’ interest in construction stocks.
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Now, even before the latest contract win was announced, a group of investors were already agitating for a direct piece of the action. On March 25, KBG, dubbed the “grandmother” of this trio of companies by some investors commenting on online forums, announced that a group of shareholders want the company to “take all necessary steps” to procure KBE — the “mother” — to distribute in specie all of its 97,445,805 shares in Oiltek to KBE shareholders at KBG’s upcoming AGM. Next KBG, upon receipt of the Oiltek shares via its stake in KBE, to similarly distribute the Oiltek shares to KBG shareholders. KBG, in its March 25 announcement, did not name the shareholders nor the quantum of their stake.
Last April, Koh Brothers received a similar request ahead of its previous AGM. According to the requisition notice posted by KBG on April 9 Morph Investments, Ong Sze Wang, Chin Phak Lin, controlling around 21 million shares between them, were the shareholders who wanted the distribution of Oiltek shares via KBE to be put to vote at the previous AGM. The resolution did not pass with 42.16% for and 57.84% against. If KBG shareholders, from a year ago were already unhappy that the value of Oiltek was not properly reflected, presumably, they will feel even more so now.
Besides this trio of companies, there are several other pairings of parent companies and their separately listed subsidiaries with mis-pricing in their respective market values.
Lum Chang Creations, Lum Chang Holdings
Lum Chang Creations (SGX:LCC) (LCC), a spin-off Catalist listing from its parent company, Lum Chang Holdings (SGX:L19) (LCH), has done well since its IPO last July. With a share price at 74 cents on April 6, the counter has rallied 196% from its listing price of 25 cents.
With this rally, LCC’s market capitalisation grew to $233.1 million and has since exceeded LCH’s market cap, which stands at just $194.8 million.
In 1HFY2026 ended Dec 31, 2025, LCC reported earnings of $11 million, an increase of 104%. With improvements in the bottom line and market capitalisation, LCC received in-principle approval from SGX to upgrade its listing to the Mainboard.
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Based on LCC’s latest annual report, LCH owns 244 million shares or a 71.11% stake in LCC. LCH’s stake in LCC alone is worth $165.7 million.
According to LCH’s latest 1HFY2026 financial statements, its balance sheet is in a net cash position of $43.1 million. Together with its stake in LCC, the combined value exceeds $200 million, which is more than its market capitalisation.
Within LCH’s balance sheet, there are still significant assets to be recognised, including $26 million in development properties and $37 million in property, plant and equipment.
Investors who buy into LCH shares today could be getting the development properties and property, plant and equipment for “free” while awaiting a potential market re-rating of LCH to a more reasonable valuation.
Fraser & Neave, Fraser & Neave Holdings
Founded in 1883, Fraser and Neave (SGX:F99) (F&N) was one of Singapore’s original conglomerates, owning multiple business lines.
In recent years, amid shifting market dynamics and a change of ownership, it has remained more focused, maintaining its position as a leading Southeast Asian consumer group through its multi-brand food and beverage portfolio and its publishing and printing business, which it has run for decades.
Similarly, F&N faces a valuation mismatch out there in the stock market. Within the company, it holds a 55.5% stake in its Malaysian counterpart, Fraser & Neave Holdings and a 24.99% stake in Vinamilk.
With a 55.5% stake in the Malaysia-listed entity, valued at $1.89 billion, and a 24.99% stake in Vinamilk, valued at $1.55 billion, the combined value was $3.44 billion, significantly higher than F&N’s current market capitalisation of $2.1 billion.
This means the market currently values F&N’s food & beverage operations at a negative value, even though the unit has consistently generated profits and positive cash flow.
One potential reason for the big discount is the low free float in the market, where F&N’s largest shareholder is chairman emeritus Charoen Sirivadhanabhakdi, who holds 87.31% through entities such as InterBev Investment (IBIL) and TCC Assets, which hold 69.7% and 17.6%, respectively.
This could have led to less interest from the investment community in the price discovery of F&N’s actual fair value.
Wilmar International, Yihai Kerry Arawana
Apart from small- and mid-cap companies, big-cap companies could also face mispricing of their market capitalisation. One example would be Wilmar International (SGX:F34) .
Wilmar’s business activities include oil palm cultivation, oilseed crushing, edible oils refining, flour and rice milling, sugar milling and refining, manufacturing of consumer products, ready-to-eat meals, central kitchen products, speciality fats, oleochemicals, biodiesel and fertilisers, as well as food park operations.
The company has over 1,000 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries and regions.
In September 2020, Wilmar spun off its China unit, Yihai Kerry Arawana (YKA) and successfully raised about RMB13.93 billion. Post-IPO, Wilmar holds an 89.99% stake in YKA. That stake alone is worth $25.2 billion today, exceeding Wilmar’s market capitalisation of $24.1 billion, even though Wilmar’s own shares have been making some gains over the past quarter as the company has progressively put its regulatory overhangs behind it.
This means that investors who invest in Wilmar today are buying into YKA’s business operations and will be able to acquire the remaining Wilmar business segments at no cost.
Singapore Telecommunications
Apart from Wilmar, another big-cap company facing market mispricing in our equity market is Singapore Telecommunications (SGX:Z74) (Singtel).
One of Asia’s leading communication technology groups, Singtel, together with its wholly owned subsidiary, Optus, also owns stakes in regional associates such as Bharti Airtel in India, AIS in Thailand, Telkomsel in Indonesia, and Globe in the Philippines.
Singtel’s stakes in the above four associates are worth $60.8 billion, representing about 73% of its current market capitalisation of $82.9 billion.
To close in the valuation gap and create more value for shareholders, Singtel has announced the Singtel28 plan back in May 2024, where it will be paying out a core dividend payout ratio of between 70% and 90% of underlying net profit and a value realisation dividend of between three to six cents per share per annum over the medium term, funded by excess capital generated from asset recycling proceeds after investing in growth initiatives.
Singtel has identified $8 billion worth of assets that could be monetised. The amount was further increased to $9 billion last May.
At the same time, Singtel also established a $2 billion share buyback programme to drive sustained growth and shareholder value.
Sunright, KESM Industries
Sunright (SGX:S71) is one of the largest independent providers of burn-in and test services and a leading manufacturer of parallel test and burn-in systems.
The company recently returned to profitability in 1HFY2026 ended Jan 31, with $1.4 million in profit. Apart from profitability, the real value of Sunright lies in its balance sheet and its 48.4% stake in Bursa-listed KESM Industries.
Sunright’s 48.4% stake in KESM is valued at $18.8 million.
As at Jan 31, Sunright’s cash and short-term deposits amount to $83.8 million. With loans and borrowings totalling $16.2 million, the company has a net cash position of $67.6 million.
With a market capitalisation of just $52.8 million, investors are valuing Sunright below its net cash position and disregarding the value of its KESM stake.
Despite the share price rising by more than 128% over the past year, it still does not clearly reflect Sunright’s value at its current level.
Meanwhile, market watchers say Sunright could be at an “inflexion point,” where the ongoing AI upcycle could benefit the company. Given its profile as a back-end player, it should be able to catch up once the actual hardware starts shipping in volume.
