[SINGAPORE] Amid tariff risks, forex volatility and other uncertainties, investors might be looking for guidance on where to put their money.
UOB Kay Hian (UOBKH) updated its alpha picks for June, focusing on domestic catalysts and high-growth opportunities across Hong Kong, Indonesia and Malaysia, based on its report on Jun 5.
Here are its top picks in the three markets.
Hong Kong
Hong Kong’s Hang Seng Index rebounded 5.3 per cent month on month in May following the 90-day tariff war truce that China and the US reached, UOBKH noted.
The agreement was to lower US tariffs on Chinese goods from 145 per cent to around 30 per cent, with reciprocal action by China on US goods.
“Nonetheless, geopolitical uncertainties and tariff war risks remain. Hence, we continue to favour domestic policy beneficiaries and defensive sectors that have been gaining traction in recent weeks,” it said.
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“May’s economic data showed weakness and we opine that the (Chinese) government would accelerate support policy implementation in the near term,” its analysts said.
They have added Prudential and Sino Biopharm to its “buy” list.
Analyst Kenny Lim maintained a “buy” call on Prudential with a higher target price of HK$128, given that its new business profit rose 12 per cent year on year in Q1 2025. He expects the positive momentum to continue into H2, mainly due to margin improvement from product repricing actions and an improving product mix.
Analysts Carol Dou and Sunny Chen also maintained a “buy” call on Sino Biopharm with a higher target price of HK$5.80.
This is largely due to the company’s strong clinical progress with its oncology pipeline and innovative drugs which drove its 2024 revenue to 28.9 billion yuan (S$5.2 billion), up 10.2 per cent from the previous year. Its six newly approved drugs in 2024 are expected to hit double-digit revenue growth in 2025.
The bank maintained a “buy” call on other Chinese stocks including Alibaba, China Resources Beer and Xiaomi.
Indonesia
UOBKH removed all of its previous alpha picks for Indonesia following notable performance shifts in May 2025.
It said that due to anticipation of monetary policy easing – which materialised when Bank Indonesia implemented a 25 basis point rate cut on May 21 – companies including Bank Central Asia and Bank BTN outperformed during the month.
Telco service company Erajaya Swasembada also delivered strong returns, supported by positive sentiments from the iPhone 16 launch event in April, increasing traction in the Chagee tea brand, and optimism ahead of the upcoming electric vehicle launch of XPeng.
Conversely, technology-related names such as GoTo and Buka underperformed, as investor attention turned towards beneficiaries of interest rate cuts and laggard sectors.
The Indonesian government introduced six stimulus initiatives aimed at boosting domestic consumption through June and July, including wage subsidies and public transport discounts.
These measures, combined with falling oil prices and a strengthening rupiah, are expected to improve sentiment in the consumer non-cyclical sector, which underperformed the Jakarta Stock Exchange Index by 5.3 per cent in May, the analysts said.
Looking ahead, UOBKH is shifting its focus towards consumer-related, “safe-haven” and high-growth stocks.
Analyst Benyamin Mikael placed a “buy” call on Central Omega Resources – with a raised target price of 570 rupiah and potential upside of 46.9 per cent – on the back of “expected continued earnings momentum and higher nickel ore prices”.
Meanwhile, analyst Willinoy Sitorus put a “buy” call on Cisarua Mountain Dairy, and raised its target price to 6,000 rupiah, with a potential upside of 29 per cent. He noted that it has seen strong consumer food sales, lower milk powder price and strengthening rupiah.
Other alpha picks include Aneka Tambang, with a target price of 3,300 rupiah, implying a slight potential downside of 0.6 per cent; Indofood CBP, with an upgraded target price of 13,800 rupiah, offering an upside potential of 27.8 per cent; and Sumber Alfaria Trijaya, with a target price of 3,400 rupiah, representing a 34.4 per cent upside from the closing price on Jun 2.
All were assigned a “buy” rating by UOBKH.
Malaysia
The Bursa Malaysia KLC Index fell 2.1 per cent in May. Sector-wise, the biggest laggards were automobiles, which dropped 17 per cent, and consumer stocks, which fell 4.3 per cent, said UOBKH.
The strongest performers were construction stocks, which jumped 11.6 per cent, property-related stocks, which climbed 3.2 per cent, and building materials.
Other notable gainers included the port sector, which rose 6.5 per cent, and selected subsectors within technology, analysts noted. On the downside, glove manufacturers posted a 11.3 per cent loss.
UOBKH’s May Malaysian portfolio outperformed the benchmark, delivering an average positive return of 7.2 per cent. Only RHB Bank posted negative returns, dropping 3.3 per cent in the month.
Looking ahead, UOBKH is shifting focus towards domestically driven catalysts, citing potential headwinds for exporters from forex volatility and a seasonal “summer lull”, coinciding with the end of the US 90-day tariff pause and signs of a US slowdown.
A major domestic catalyst is the kick-off of the Penang LRT project, benefiting construction players such as Gamuda and Hume Cement.
Other key drivers included continued strong earnings from Duopharma and NorthEast, and the expected broad adoption of MyDigital ID Superapp, developed by MyEG-Mimos – particularly among subsidy recipients and travellers.
UOBKH has taken a less defensive stance in its latest alpha picks, adding Hume Cement and removing Time.com, citing limited near-term catalysts for IOI Properties and NationGate, and reduced need for defensives following the market pullback.
Analyst Ku Wei Xiang maintained a “buy” call on Hume Cement, with a target price of RM4.05, implying 54.5 per cent upside from the closing price on Jun 9.
He noted that the commencement of the Penang LRT project would translate to around RM2 billion (S$607.1 million) to RM2.6 billion in cement demand, assuming a RM13 billion construction cost of the project.
Other alpha picks included Duopharma, with an unchanged target price of RM1.46; Eco World, with an unchanged target price of RM2.37; Gamuda, with a raised target price of RM5.55; IJM Corporation, with a higher target price of RM3.15; and NorthEast, with an unchanged target price of RM0.47.
All were assigned a “buy” rating by the research house.
