UOBKH’s ‘Alpha Picks’ outperform STI in February; Keppel, Singtel added for March

[SINGAPORE] With volatility heightened by geopolitical tensions, UOB Kay Hian (UOBKH) has repositioned its “Alpha Picks” portfolio for March to favour defensive large-caps and yield-accretive plays, the brokerage said on Tuesday (Mar 3).

Despite the volatile backdrop, the brokerage’s portfolio outperformed the benchmark Straits Times Index (STI) in February. While the STI rose 1.8 per cent month on month, the Alpha Picks portfolio gained 3.9 per cent on an equal-weighted basis and 3 per cent on a price-weighted basis. It slightly underperformed the benchmark only on a market-cap weighted basis.

Sector performance in February was mixed. Industrials rose 17.7 per cent, telecommunications was up 8.9 per cent and healthcare climbed 6.5 per cent, while technology fell 4.4 per cent, finance dropped 1.9 per cent and real estate investment trusts (Reits) were down 1 per cent.

For March, UOBKH added Huationg Global, Keppel and Singtel, citing “near-term share price catalysts” for the trio.

Conversely, the brokerage removed Lendlease Global Commercial Reit , cutting its loss after the Reit posted weaker first-half results and announced a discounted preferential offering. It also took profit on DFI Retail Group , China Sunsine Chemical and Reclaims Global .

“Heightened volatility appears to be here to stay for the near term,” UOBKH noted, pointing to the S$3.8 billion traded on the Singapore Exchange on Monday following geopolitical escalations involving the US, Israel and Iran.

To ride out the storm, the brokerage said it favours sectors such as aviation, consumer staples, construction, energy and financials.

Here are the 14 stocks in UOBKH’s March Alpha Picks portfolio, all of which have been assigned a “buy” call:

New additions

• Huationg Global : The civil engineering contractor is expected to ride the public infrastructure boom with its S$512 million orderbook, which provides multi-year earnings visibility. As a Building and Construction Authority A1-graded contractor, it has access to public tenders of “unlimited value”. UOBKH noted the stock trades at an undervaluation of eight times its 2026 price-to-earnings (PE) ratio, backed by a strong balance sheet with S$56 million in net cash.
• Keppel : UOBKH highlighted Keppel’s “strong set of results”, with net profit from continuing operations rising 39 per cent year on year to S$1.1 billion, supported by stronger recurring income. The conglomerate’s return on equity (ROE) improved to 18.7 per cent, highlighting the success of its asset-light strategy. Catalysts include further asset monetisation and special dividends, with management aiming to pay out 10 to 15 per cent of monetisation proceeds.
• Singtel : The telco posted a 9.4 per cent rise in core net profit for its third fiscal quarter to S$744 million, supported by strong performances from Optus and NCS. Its acquisition of a 25 per cent stake in ST Telemedia Global Data Centres is expected to strengthen long-term growth. UOBKH sees catalysts in the telco’s asset recycling target of S$9 billion and the potential unlocking of value through the listing of NCS.

Other Alpha Picks

• ASL Marine : The group beat expectations with a 1,076 per cent year-on-year jump in first-half net profit to S$17.1 million. Shiprepair revenue rose 9.7 per cent, driven by higher-value projects. The brokerage noted ASL’s strengthening balance sheet, with net gearing improving significantly to 0.77 times.
• China Aviation Oil : As a key player in China’s civil aviation market, the company benefits from the recovery in international air travel. Its 33 per cent stake in the sole jet-fuel supplier at Shanghai Pudong International Airport remains a key earnings contributor.
• City Developments Limited (CDL) : CDL delivered a “sharp earnings rebound” in 2025, with profit tripling to S$630 million largely due to divestments. The developer declared a total dividend of S$0.28 for 2025 and established a formal policy to pay out at least 35 per cent of core earnings.
• CSE Global : The company secured a record S$1.03 billion in new orders in 2025, driven by electrification demand in the US. A US$143 million hyperscale data centre contract secured in December is expected to ramp up revenue from the second quarter of 2026.
• Food Empire : Excluding one-off items, core profit surged 38 per cent to US$68.6 million in 2025. Growth was led by the Russian market, which grew 35 per cent. New production facilities in Kazakhstan and Malaysia are set to commence operations in the first half of 2026, underpinning long-term growth.
• Hong Leong Asia : The group’s subsidiary, China Yuchai International, has filed to list its unit, Guangxi Yuchai Marine & Genset Power, on the Hong Kong Stock Exchange. This unit manufactures engines used by data centres for backup power, a high-growth segment.
• OCBC : Regarded as the “most well-capitalised bank in Singapore,” OCBC has a CET-1 capital adequacy ratio of 15.1 per cent, giving it potential for inorganic growth. The bank has declared a 60 per cent total dividend payout ratio for 2025 and launched a S$1 billion share buyback programme.
• PropNex : The agency reported a 43 per cent jump in revenue to S$1.12 billion for 2025. It declared a dividend payout ratio of 99.9 per cent, well above its policy range. UOBKH expects a dividend yield of 4.9 per cent for 2026, supported by a net cash position of S$149 million.
• Sats : Management has noted good progress towards FY2029 targets, including revenue exceeding S$8 billion and ROE above 15 per cent. UOBKH believes fears regarding the US-Iran conflict are “overblown” for Sats, as its primary cargo operations in Saudi Arabia and Oman are distanced from combat areas.
• UltraGreen.ai : The global leader in indocyanine green (ICG) holds a 68 per cent global market share. UOBKH forecasts earnings growth of 22 per cent compounded annually from 2024 to 2027, driven by higher procedure volumes and the adoption of fluorescence-guided surgery.
• Valuetronics : The company’s shift towards higher-margin industrial and commercial electronics has improved gross margins to 18.8 per cent. With a net cash position of HK$1.1 billion – about half its market cap – the stock offers “meaningful upside optionality” for dividends or buybacks.