The track record of our annual 10 stock picks is a strong testament to that.
At the beginning of every year, we curate a list of 10 stocks that we believe can outperform the market. The selection process is primarily top-down: We begin by assessing the macroeconomic outlook, identify sectors likely to benefit under that environment, and pinpoint the companies in those sectors with the strongest prospects.
During our company-level assessment, we weigh multiple factors, including growth prospects, valuation, balance sheet strength, shareholding structure, and key management quality to evaluate the overall risk-reward profile. Ultimately, our objective is to maximise risk-adjusted returns by achieving the highest possible gains without taking on unnecessary risks.
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We are very transparent with the performance of our stock picks. We do not change the picks halfway through the year and their year-to-date performance is updated and published monthly on absolutelystocks.com, which we recommend subscribing to, if you haven’t yet.
Our stock picks have delivered 22.9% average annual returns since 2015
Since we started this annual exercise in 2015, we have outperformed the market in nine of the 11 years. On average, the portfolio delivered an impressive return of 22.9% per year. This has far exceeded the FBM KLCI’s average annual return of 3.2% (see chart).
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This year, Asia Analytica’s 10 stock picks beat the market once again, delivering a 10.3% gain in 2025, well ahead of the FBM KLCI’s 3.9% total return. Seven of our 10 stocks recorded positive gains during the year (see table). Of these, four stocks achieved double-digit returns: KSL Holdings (up 77.3%), United Plantations (up 45.2%), ITMAX System (up 26%) and Hong Leong Industries (up 17.1%).
KSL, United Plantations and ITMax top the winner’s list
The top performer during the year was KSL Holdings. The Johor-centric property developer was selected because of the favourable property demand outlook in Johor, underpinned by two major catalysts: the Johor Bahru-Singapore Rapid Transit System, scheduled to begin operations in January 2027, and the Johor-Singapore Special Economic Zone, signed into agreement in January 2025. In addition, KSL delivered a sharp post-pandemic earnings recovery, with its property development segment posting record-high revenue and profits in FYDec2024.
Despite this strong financial performance, the stock began the year deeply undervalued, trading at a price-to-book (P/B) ratio of just 0.4 times, which was the lowest among its peers. The valuation gap finally began to close in 2H2025 as management stepped up investor engagement and improved the transparency of the company’s disclosures. The declaration of its first dividend in nearly a decade on June 30 also strengthened investor confidence by signalling a renewed commitment to shareholder returns. Stronger investor communication and clearer return visibility helped drive a 77.3% share price gain over the year.
Following closely behind was United Plantations. We included a plantation company in our 10 stock picks based on our expectation that crude palm oil (CPO) prices would remain elevated in 2025.
This is because planted areas in both Malaysia and Indonesia have largely plateaued, while years of under-replanting during periods of low CPO prices in the 2010s have led to ageing trees and declining yields. Concurrently, global palm oil inventories have remained flat despite rising demand, signalling a tightening stock situation.
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Among plantation players, United Plantation stands out for its superior operating efficiency. It consistently delivers the lowest production costs, the highest fresh fruit bunch (FFB) yields, and industry-leading profit margins and return on equity. Yet, despite its superior quality, the stock traded at valuations comparable to peers at the start of the year, without any meaningful premium, which made it our preferred stock pick within the plantation sector.
Our thesis played out as expected. CPO prices hovered above RM4,000 ($1,266) per tonne for most of the year, keeping plantation companies highly profitable.
Sentiment towards Malaysian plantation companies was further bolstered by a massive seizure of plantation lands in Indonesia. In January, Indonesian President Prabowo Subianto signed a new regulation on forest area management, aimed at taking firm action against parties illegally occupying forest land. Under this regulation, businesses that have been using forest areas for plantations without the necessary forestry permits now face reclamation of their land.
A dedicated Task Force for Forest Area Management was established to impose fines, reclaim land and restore forest assets. By March, the task force had begun identifying and verifying illegal plantations, uncovering widespread non-compliance across the industry.
By October, the Indonesian government had seized about 3.7 million hectares of palm oil estates, equivalent to more than 20% of the country’s total planted area. Roughly 40% of these seized lands were transferred to a newly formed state-owned enterprise, PT Agrinas Palma Nusantara.
Although Agrinas has an ambitious mandate to bolster food and energy security, support the biodiesel programme, and promote sustainable and transparent plantation management, it lacks operational experience in plantation management. It is currently led by a former special forces commander with no prior industry background, raising doubts over whether the reclaimed estates can be managed efficiently.
These operational uncertainties could suppress Indonesia’s palm oil output and help keep CPO prices elevated. As a result, sentiment towards the plantation sector strengthened in 2025, making it the second best-performing sector on Bursa Malaysia. United Plantation outperformed its peers, rising 45.2% year to date (YTD).
Another strong performer in 2025 was ITMax System. The company has delivered consistent revenue and earnings growth since its listing in 2022. Revenue more than doubled from RM107 million in FYDec2022 to RM220 million in FY2024, while net profit nearly doubled over the same period, rising from RM41 million to RM80 million.
The company, which began by primarily providing networked systems such as lighting, video surveillance, traffic management and communications services to DBKL, successfully expanded into Johor in 2024 by securing contracts from local city councils to supply video surveillance solutions, traffic light systems and smart parking operations.
This year, ITMax System continued to extend its geographical footprint by winning closed-circuit camera system contracts in Penang and intelligent parking operator contracts from local councils in Selangor. This expanding regional presence, combined with a solid 16.1% y-o-y net profit growth in 9MFY2025, strengthened investor confidence, driving the share price to a 26% gain YTD.
Malaysia’s Yamaha motorcycle producer Hong Leong Industries also had an exceptional year, delivering a 17.1% YTD total return on the back of robust domestic motorcycle demand. Total newly registered motorcycles in Malaysia rose 7.5% y-o-y in the first nine months of 2025, while Hong Leong Industries outperformed the sector with revenue and core pre-tax profit growth of 10.4% y-o-y and 24.8% y-o-y respectively.
Management’s efforts to elevate the brand’s market positioning, shift the sales mix towards higher-margin models and enhance operational efficiency have paid off, as reflected in the improvement in core pre-tax profit margins from 22.1% in 9MCY2024 to 25% in 9MCY2025.
We selected the company for its attractive valuation relative to its growth prospects. Even after the share-price rally, the stock remains reasonably priced at a price-earnings ratio (PER) of 10.1 times and continues to offer a solid dividend yield of 5.4%. In addition, the company maintains a sizeable net cash position of RM2 billion, equivalent to roughly 40% of its market capitalisation.
Our undervalued pick, Harbour-Link Group, which is currently trading at an undemanding PER of just 4.9 times, delivered a modest 5.8% YTD gain. The fundamentals of this Sarawak-based shipping and logistics company remain solid. Net profit rose 16.9% y-o-y in 9MCY2025, supported by improved vessel utilisation and higher freight rates. The company also continues to generate robust cash flow, lifting its net cash position to RM388 million, equivalent to 68% of its current market capitalisation of RM574 million.
Meanwhile, Gamuda gained 4.4% YTD, supported by steady earnings growth and continued contract wins. The company’s net profit rose 10% y-o-y in FYJuly2025, catalysed primarily by a surge in domestic construction activities.
Construction revenue from Malaysia more than doubled from RM1.6 billion in FY2024 to RM4 billion in FY2025, fuelled by major infrastructure rollouts and expanding data centre projects. In contrast, overseas construction revenue declined slightly by 5.1% y-o-y to RM8.5 billion. The stronger contribution from Malaysia not only lifted overall revenue, but also improved profitability, as the domestic construction segment commands a higher net profit margin of 7.6%, compared with 3.7% for overseas project in FY2025.
Gamuda also continued to secure major new contracts throughout the year. Notable wins included the RM6.4 billion Penang LRT project, a RM3.2 billion MRT contract in Taiwan, a RM2.6 billion LNG terminal project in Taiwan, and a RM2.4 billion hydroelectric project in Sabah. In total, it secured RM22.1 billion in new jobs during the financial year, expanding its order book by 19% y-o-y to RM38 billion, equivalent to roughly three times its FY2025 construction revenue.
ICT product distributor VSTECS experienced a highly volatile year. Its share price fell 14.8% in January after the US announced an “AI diffusion framework” that could restrict AI chip exports to Malaysia. The price decline deepened to 38.6% YTD by April, following US President Donald Trump’s tariff announcement.
Despite the sharp share-price correction, the company’s fundamentals remained resilient. Revenue grew 20.2% y-o-y in 9MFYDec2025 and net profit grew 29.4% y-o-y. The enterprise system segment, which supplies commercial and enterprise products, including data centre equipment, was the primary earnings driver, delivering a 42.8% y-o-y increase in pre-tax profit.
Meanwhile, pre-tax profit of its ICT services segment grew 38.5% y-o-y, supported by accelerating cloud adoption among businesses. The strong operational performance helped restore investor confidence. The stock rebounded swiftly from its April lows, fully recovering earlier losses and now stands with a 1.8% YTD gain.
A review of our three non-performing stocks
On the flip side, three of our top 10 picks recorded share-price declines.
Construction company Kumpulan Kitacon, which we selected for its attractive valuation — trading at a PER of just 6.8 times, with net cash equivalent to 56% of its market capitalisation — fell a marginal 0.6% YTD.
Its business remained stable, with earnings rising 2.5% y-o-y in 9MFYDec2025. The company also continued to strengthen its earnings visibility, with its order book increasing 15% YTD to a new record high of RM1.6 billion.
Larger declines came from SDS Group and LGMS. SDS Group’s share price fell 19% YTD, in tandem with the 21.3% y-o-y drop in its net profit in 9MCY2025. Its retail segment, which operates bakery and café outlets, faced weaker footfall, while higher fleet costs compressed margins.
Similarly, LGMS reported a 23.2% y-o-y decline in net profit in 9MFYDec2025. The cybersecurity company’s revenue stagnated as clients delayed projects amid tariff uncertainty, while an expanded workforce, hired in anticipation of stronger demand, raised costs and squeezed margins. The weaker-than-expected results disappointed investors, leading to a steep 54.5% YTD decline in its share price.
One can still find good stocks in an underperforming market
All in all, most of our 2025 picks delivered positive returns, and the gains comfortably outweighed the losses, resulting in a total portfolio return of 10.3%.
Our track record over the past 11 years demonstrates that attractive returns in the Malaysian stock market remain achievable for retail investors, even during periods when the broader market falls.
As always, we have identified 10 companies that we believe are well-positioned to outperform in 2026, and we will be publishing our selections on absolutelystocks.com. Subscribe to find out!
Portfolio performance
The Malaysian portfolio gained 0.6% for the week ended Dec 17, underperforming the broader market. The FBM KLCI gained 1.9% over the same period. Malayan Banking (+1.8%), United Plantations (+1.4%) and LPI Capital (+1.2%) were the biggest winners. None of our portfolio stocks ended the week lower. Total portfolio returns now stand at 199.6% since inception. This portfolio is outperforming the benchmark FBM KLCI, which is down 10.3% over the same period, by a long, long way.
The Absolute Returns Portfolio also gained 0.5% last week, lifting total returns since inception to 43.0% . The top three gainers were Ping An - A (+9.2%), Ping An - H (+6.3%) and Trip.com (+2.8%). Kanzhun (-6.6%), Alibaba (-4.7%) and ChinaAMC Hang Seng Biotech ETF (-3.8%) were the biggest losers.
The AI Portfolio, on the other hand, fell 4.5% as fears over debt financing for data-centre buildouts by companies like Oracle and Coreweave weighed on the tech trade. Total returns since inception now stands at 2.4%. The two gainers were RoboSense Technology (+3.4%) and Twilio (+3.1%), while Marvell Technology (-11.6%), Datadog (-9.6%) and ServiceNow (-8.3%) were the biggest losers.
Disclaimer: This is a personal portfolio for information purposes only and does not constitute a recommendation or solicitation or expression of views to influence readers to buy/sell stocks, including the particular stocks mentioned herein. It does not take into account an individual investor’s particular financial situation, investment objectives, investment horizon, risk profile and/or risk preference. Our shareholders, directors and employees may have positions in or may be materially interested in any of the stocks. We may also have or have had dealings with or may provide or have provided content services to the companies mentioned in the reports.
