RHB Research recently published the Top 20 Malaysia Small Cap For 2023 (20 Jewels), which marks the 19th edition that is part of a regional compendium of 80 top small-cap investment ideas from four ASEAN countries. Just as market sentiment was beginning to turn following the worst of the pandemic, as the interest rate cycle entered a matured stage, sentiment took another knock from the banking crisis in the US and Europe in the aftermath of the swift monetary policy tightening by the US Federal Reserve.
Local investor sentiment has remained tentative in the past year as investors were drawn to other regional opportunities and asset classes. Nonetheless, investors continued to show interest in winning small-cap ideas to generate alpha for their respective portfolios – especially as valuations have also retraced. The stock selection remains paramount, and investors should focus on fundamentally strong companies that have the potential to deliver above-industry growth, as well as turnaround candidates.
Notably, the Top 20 Malaysia Small Cap Jewels 2022 outperformed the broad market with a holding period return of 15.7%, beating the FBM KLCI’s and FBM SC’s returns of -8.5% and -5.5%.
Without further ado, let’s look at the list of Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels) by RHB Research:
1. Aemulus Holdings
2. Apex Healthcare
3. Bonia Corporation
4. Hiap Teck Venture
5. Kumpulan Kitacon
6. Kronologi Asia
7. Lee Swee Kiat Group
8. MCE Holdings
9. Malayan Flour Mills
10. OM Holdings
11. P.I.E. Industrial
12. Scicom (MSC)
13. SDS Group
14. Supercomnet Technologies
15. Thong Guan Industries
16. Tune Protect Group
17. Uzma
18. Vestland
19. VSTECS
20. Wah Seong Corporation
Here’s the Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels) at a glance:
The Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels) are spread across seven sectors with an average market cap of MYR597m. The consumer and industrial products & services sectors feature prominently, making up 50% of our picks. All but four – which are ACE Market-listed – of the 20 names are in the Main Market. None of the 20 companies featured this year are within RHB Research’s existing coverage as they continue to seek new investment ideas.
*All investors are advised to conduct their own independent research into individual stocks that are listed in the Top 20 Malaysia Small Cap Companies For 2023 (20 Jewels) before making any decision to buy or sell. Investors are also advised that past stock performance is no guarantee of its future price.
