‘A painful March’: UOBKH’s Alpha Picks underperform STI as Iran war triggers sell-offs

[SINGAPORE] UOB Kay Hian’s (UOBKH) Alpha Picks portfolio underperformed the Straits Times Index (STI) by 6.4 percentage points on an equal-weighted basis in March, as jitters over the Iran war triggered sell-offs.

The portfolio shed 8.6 per cent month on month on an equal-weighted basis, while the benchmark index lost 2.2 per cent, amid the resurgence of a risk-off sentiment following heightened policy uncertainty in the US.

On price-weighted and market cap-weighted bases, the portfolio fell 6.5 per cent and 2.8 per cent, respectively, as Singapore equities weakened in March and sectors across the board registered “largely negative” performances.

Only 17 out of 83 stocks (or around 20 per cent) in UOBKH’s overall portfolio recorded gains in March. These included two of its Alpha Picks for that month.

Amid weakened property sentiment, real estate players led the declines, with PropNex dropping 18.1 per cent on the month and City Developments Ltd (CDL) losing 16.4 per cent.

Meanwhile, construction firm Huationg Global shed 16.1 per cent on fears of higher fuel costs hitting margins, while UltraGreen.ai declined 15.3 per cent and Hong Leong Asia fell 13 per cent on tech and industrial weakness.

On a broader level, Sats retreated 10.2 per cent and Keppel was down 10 per cent on softer global trade sentiment.

Out of the Alpha Picks portfolio’s 14 stocks, only OCBC and China Aviation Oil notched gains in March due to their defensive qualities, up 2.5 per cent and 2 per cent month on month, respectively.

Against this backdrop, the Alpha Picks portfolio welcomed two new entrants in April: NTT Data Centre Reit (NTT DC Reit) was added for its merger and acquisition (M&A) catalyst and yield and First Resources , for its exposure to Indonesia’s B50 scheme, a palm-oil based biodiesel programme.

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Citing profit taking, UOBKH dropped ASL Marine and CSE Global from the list “following their strong prior performance and recent pullback”.

Stocks with “buy” rating

UOBKH’s April Alpha Picks portfolio consists of:

• First Resources : Amid recent oil price spikes, the group may benefit from Indonesia’s pursuit of its B50 biodiesel mandate with an accelerated time frame. An official announcement of the faster time frame may boost the stock. Its revised dividend policy – set at 60 per cent of recurring net profit from 50 per cent previously – should continue to be a positive.
• Singtel : Citing strengthened long-term growth optionality via data centre demand exposure, UOBKH noted that the telco’s expected expansion in operational capacity to 1.7 gigawatts could reinforce recurring cash flows and position digital infrastructure as a key earnings driver beyond FY2026. Share price catalysts are the monetisation of 5G alongside data centres and/or its subsidiary NCS as well as market repair in Singapore.
• Keppel : Amid Keppel’s ongoing asset monetisation, UOBKH noted the management’s aim to pay out 10 to 15 per cent of the gross value of monetisation completed in any given financial year. Share price catalysts include the positive impact of M&A transactions linked to its Bifrost asset, the sale of legacy rigs and potential capital returns to shareholders, the payment of M1 sale proceeds in special dividends and new asset-under-management targets.
• Hong Leong Asia : UOBKH pointed to the group’s guidance for sustained earnings growth in 2026, as Singapore construction demand remains “supportive” with industry contracts projected at S$47 billion to S$53 billion in 2026. Malaysian infrastructure spending is also set for growth. Continued strong sales and earnings recovery alongside further value-unlocking initiatives are among share price catalysts.
• PropNex : The real estate broker’s continued strong operating cash flow and net cash position of S$149 million as at end-2025 support a forecast dividend yield of 4.9 per cent for 2026. Continued sell-through of new property launches, fund inflows from the Monetary Authority of Singapore’s Equity Market Development Programme and higher-than-expected price increments for private residential and Housing & Development Board resale flats in 2026 may catalyse its share price.
• CDL : UOBKH noted that CDL’s financial flexibility remains strong with S$2.1 billion cash and S$4.2 billion liquidity including committed facilities. It also highlighted the developer’s “sharp earnings rebound” in 2025, with a trebling of net profit to S$630 million. Share price catalysts include continued divestment and capital recycling progress and the use of divestment proceeds in the form of special dividends.
• Huationg Global : With a potential mainboard transfer on the horizon, Huationg offers “deep value supported by its strong order book” and net cash reserves of S$56 million, said UOBKH. Its S$535 million order book makes it well-positioned for growth from 2026 to 2027, supported by major infrastructure projects such as Changi Airport Terminal 5 and the Cross Island Line. Higher-than-expected order wins, margin expansion and the potential mainboard move are share price catalysts.
• Food Empire : Capacity expansion in countries such as Kazakhstan and Malaysia and lower coffee prices are set to support margin expansion. Earnings-accretive acquisitions alongside better-than-expected earnings and dividends are share price catalysts. The company’s net profit was at US$68.6 million, beating analysts’ expectations by 15 per cent.
• UltraGreen.ai : Its Asia-Pacific expansion plans are gaining ground as recent regulatory approvals across India, Thailand, the Philippines and Bangladesh could grow its footprint to 45 territories. The global leader in medical diagnostics dye indocyanine green (ICG) has “superior profitability” and US$173 million in net cash to fund expansion. Share price catalysts include higher-than-expected product margins and the accelerated development of its data platform. The cyberattack on medtech firm Stryker could drive hospitals to alternative suppliers of ICG vials, also positioning UltraGreen to capture incremental demand.
• Valuetronics : Its high net cash position of around HK$1.1 billion (S$179.2 million), or roughly half its market capitalisation, provides “meaningful upside optionality” for more dividends or share buybacks, enhancing shareholder returns. It counts higher-than-expected dividends, potential M&As and proactive management amid market challenges as share price catalysts.
• China Aviation Oil : With US$687 million in net cash, which is around half its market capitalisation, no debt, and an improving operating cash flow, its strong balance sheet supports growth and returns, providing flexibility for expansion and potential upside for shareholder returns. Sustained travel activity growth at Shanghai Pudong International Airport, a positive restructuring outcome at the parent level and higher fuel prices are among share price catalysts.
• OCBC : As the most well-capitalised Singapore bank, OCBC has “potential to deploy surplus capital to generate inorganic growth”, UOBKH analysts said. Catalysts include its share buyback scheme, which may boost share price, alongside its pursuit of organic and inorganic growth.
• Sats : Better-than-expected second-quarter and third-quarter performances for FY2026 support confidence in its medium-term growth outlook, while consistent market share growth in the past nine quarters further strengthens this conviction, UOBKH said. Moreover, Iran war fears look overblown as the ground handler’s Middle East operations are not directly affected by the US-Iran war. Stronger-than-forecast organic earnings growth is a share price catalyst.
• : Its lease for its SG1 data centre, renewed at a “significantly higher rent” delivers positive rental reversion of 23 per cent and fixed annual rent escalations of 5 per cent, said UOBKH. Potential Europe and Japan acquisitions and an uptick in portfolio occupancy for the second half of FY2026 and FY2027 are share price catalysts.