Strategy
Strategy – SMID Cap Outlook: SMID Cap Retail Webinar Takeaway: Focusing On Opportunities
Analyst
Analyst
Analyst
Highlights
- Held on 16 Jul 26, our SMID Cap retail webinar garnered interest from over 180 retail investors.
- Key questions focused on buy opportunities amidst the recent broad-based weakness in the Singapore SMID-cap market and several large cap names.
- We highlighted BKM, OTEK, FEH & RSTON as our top SMID Cap picks.
Analysis
- Our SMID Cap retail webinar on 16 Jul 26 garnered interest from over 180 retail investors. We highlighted four key SMID cap picks for Jul 26, namely BKM, OTEK, FEH & RSTON.
- BKM: We like Beng Kuang Marine (BKM) for its improving earnings visibility, driven by growing FPSO exposure and its highly recurring, asset-light business model. Strong 1H26 contract wins brought orderbook to S$70.7m as at end-Jun 26, providing solid revenue visibility. Full consolidation of ASOM should also further enhance earnings. The stock trades at an attractive 9x 2027F PE vs peers at around 15x. Our target price is S$0.75, pegged to 14x 2027F PE.
- OTEK: We like Oiltek (OTEK) for its strong earnings outlook, supported by the RM1.4b Heads of Agreement (HOA), its healthy net cash position, and favourable industry tailwinds. Growing demand for sustainable aviation fuel (SAF) and the global fats and oils market should continue to drive project wins and earnings growth. Following the recent pullback, we see scope for valuation re-rating. Our target price is S$2.78, pegged to 28x 2027F PE.
- FEH: We like Food Empire (FEH) for its consistent double-digit earnings growth, strong pricing power and expanding production footprint. Two upcoming production facilities should support the next phase of capacity expansion and long-term growth, while continued dividends and share buybacks programme enhances shareholder returns. Following its recent correction, the stock trades at an undemanding 18x 2026F PE vs peers at around 24x. Our target price is S$3.49, pegged to 25x 2026F PE.
- RSTON: We like Riverstone (RSTON) for its resilient cash generation, strong balance sheet and attractive dividend yield. Its debt-free, net cash position and ongoing shift towards higher-value gloves support sustainable earnings growth, while the stock continues to trade at a slight discount to peers. Our target price is S$1.10, pegged to 19x 2027F PE.
- Overall, we continue to favour our SMID-cap picks (BKM, OTEK, FEH and RSTON) for their strong fundamentals and differentiated growth drivers. Despite the recent SMID-cap pullback, we view the weakness as a good buying opportunity and expect these companies to benefit from the ongoing SMID-cap upcycle, with further support from continued EQDP fund deployment and potential sector re-rating.
Highlights
- Held on 16 Jul 26, our SMID Cap retail webinar garnered interest from over 180 retail investors.
- Key questions focused on buy opportunities amidst the recent broad-based weakness in the Singapore SMID-cap market and several large cap names.
- We highlighted BKM, OTEK, FEH & RSTON as our top SMID Cap picks.
Analysis
- Our SMID Cap retail webinar on 16 Jul 26 garnered interest from over 180 retail investors. We highlighted four key SMID cap picks for Jul 26, namely BKM, OTEK, FEH & RSTON.
- BKM: We like Beng Kuang Marine (BKM) for its improving earnings visibility, driven by growing FPSO exposure and its highly recurring, asset-light business model. Strong 1H26 contract wins brought orderbook to S$70.7m as at end-Jun 26, providing solid revenue visibility. Full consolidation of ASOM should also further enhance earnings. The stock trades at an attractive 9x 2027F PE vs peers at around 15x. Our target price is S$0.75, pegged to 14x 2027F PE.
- OTEK: We like Oiltek (OTEK) for its strong earnings outlook, supported by the RM1.4b Heads of Agreement (HOA), its healthy net cash position, and favourable industry tailwinds. Growing demand for sustainable aviation fuel (SAF) and the global fats and oils market should continue to drive project wins and earnings growth. Following the recent pullback, we see scope for valuation re-rating. Our target price is S$2.78, pegged to 28x 2027F PE.
- FEH: We like Food Empire (FEH) for its consistent double-digit earnings growth, strong pricing power and expanding production footprint. Two upcoming production facilities should support the next phase of capacity expansion and long-term growth, while continued dividends and share buybacks programme enhances shareholder returns. Following its recent correction, the stock trades at an undemanding 18x 2026F PE vs peers at around 24x. Our target price is S$3.49, pegged to 25x 2026F PE.
- RSTON: We like Riverstone (RSTON) for its resilient cash generation, strong balance sheet and attractive dividend yield. Its debt-free, net cash position and ongoing shift towards higher-value gloves support sustainable earnings growth, while the stock continues to trade at a slight discount to peers. Our target price is S$1.10, pegged to 19x 2027F PE.
- Overall, we continue to favour our SMID-cap picks (BKM, OTEK, FEH and RSTON) for their strong fundamentals and differentiated growth drivers. Despite the recent SMID-cap pullback, we view the weakness as a good buying opportunity and expect these companies to benefit from the ongoing SMID-cap upcycle, with further support from continued EQDP fund deployment and potential sector re-rating.
Analyst
Analyst
Analyst
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