Top small cap stocks to watch in Singapore in 2025

What are small cap stocks?

Small cap stocks are shares in smaller publicly traded companies. In Singapore, these companies typically have a market capitalisation of less than S$1 billion¹. Market capitalisation is the total value of a company's outstanding shares – calculated by multiplying the share price by the number of shares available.

These companies are usually in their growth phase, offering more potential for rapid expansion compared to established large cap stocks. While large cap companies like DBS or Singapore Airlines are household names, small cap stocks represent the up-and-coming businesses that could be tomorrow's market leaders.

How Singapore categorises its stocks
 

Singapore's stock market is divided into different segments:

Small cap stocks (Under S$1B)

• Tracked by the FTSE ST Small Cap Index²
• Higher growth potential
• More volatile pricing
• Less institutional investor coverage
   

Mid cap stocks (S$1B - S$10B)

• Balance between growth and stability
• Moderate risk profile
• Developing market presence
   

Large cap stocks (Over S$10B)

• Featured in the Straits Times Index
• Established market leaders³
• Lower volatility
• Consistent dividend payments

Pros and cons of trading small cap stocks

Why traders choose small caps
 

Higher growth potential

Small companies can double or triple in size when they execute well. A major contract win that might add 1% to a large company's revenue could boost a small cap's earnings by 50%.

Hidden opportunities

Less analyst coverage means potential bargains. You might spot undervalued companies before institutional investors catch on.

Takeover targets

Large companies often acquire successful small caps, typically paying premiums of 20-40% above market price.

The risks you need to know
 

Wild price swings

Daily moves of 10-20% are normal. Earnings surprises can trigger 30%+ moves in either direction.

Harder to trade

Lower volumes mean wider spreads and difficulty executing large orders quickly.

Higher failure rate

Small companies have less financial cushion during tough times. Some may not survive economic downturns.

Limited information

Fewer research reports and less comprehensive financial disclosure make due diligence challenging.

Top 5 small cap stocks to watch

Based on market performance, here are five Singapore small cap stocks worth considering:

1. Singapore Post Limited (SGX: S08)
 

Industry: Postal and logistics

Market cap: S$1.29 billion⁴

Current focus: E-commerce logistics transformation

Singapore Post is transitioning from traditional mail services to become a regional e-commerce logistics provider. The company's strategic pivot includes building advanced sorting facilities and expanding its last-mile delivery network across Southeast Asia.

Investment highlights:

• Strong e-commerce tailwinds in Southeast Asia
• Established logistics infrastructure
• Government backing for digital transformation initiatives
• Potential for technology-driven revenue streams

2. UMS Integration Limited (SGX: 558)
 

Industry: Precision engineering

Market cap: S$809 million⁵

Current focus: Semiconductor equipment manufacturing

UMS Integration specialises in manufacturing high-precision components for semiconductor equipment manufacturers, alongside aerospace and automotive industries. The company operates across Singapore, Malaysia, Taiwan and other international markets.

Investment highlights:

• Leading position in semiconductor equipment supply chain
• Diversified operations across multiple industrial sectors
• Strong dividend yield of 4.56%
• International manufacturing footprint

3. CSE Global Limited (SGX: 544)
 

Industry: Technology solutions

Market cap: S$297 million⁶

Current focus: Infrastructure and industrial automation

CSE Global provides engineering and technology solutions for infrastructure projects globally, specialising in automation systems and industrial digitisation.

Investment highlights:

• Exposure to global infrastructure spending trends
• Diversified international project portfolio
• Expertise in high-growth digitisation sectors

4. Sheng Siong Group Ltd (SGX: OV8)
 

Industry: Food and staples retailing

Market cap: S$2.75 billion⁷

Current focus: Supermarket chain expansion

Sheng Siong operates one of Singapore's largest supermarket chains, known for competitive pricing and efficient operations across the island.

Investment highlights:

• Defensive business model with steady consumer demand
• Efficient supply chain and cost management
• Strategic store locations across Singapore
• Consistent revenue growth and profitability

5. AEM Holdings Ltd (SGX: AWX)
 

Industry: Semiconductor test equipment

Market cap: S$388 million⁸

Current focus: Global semiconductor testing solutions

AEM Holdings is a leading provider of semiconductor and electronics test solutions, operating manufacturing facilities across Singapore, Malaysia, China, USA, Vietnam and Finland.

Investment highlights:

• Exposure to growing global semiconductor industry
• International manufacturing and R&D footprint
• Comprehensive test solutions across multiple sectors
• Strong position in high-tech equipment market

How to trade small cap stocks with IG Singapore

1. Open an IG account
2. Use IG's stock screener and company financials for research
3. Learn how to manage your trading risk
4. Set position size, add stop losses and place your trades

Start trading small cap stocks

Footnotes

_{¹ NTU Investment Interactive Club - The Basics of Investing in Small, Mid, and Large-cap Stocks, 2020}

_{² Singapore Exchange (SGX) - FTSE ST Index Series}

_{³ Singapore Exchange (SGX) - Straits Times Index Information}

_{⁴ TradingView - Singapore Post (SGX:S08) Market Capitalisation, May 2025}

_{⁵ Stockopedia - UMS Integration Share Price Analysis, May 2025}

_{⁶ Simply Wall St - CSE Global Market Capitalisation Analysis, April 2025}

_{⁷ Stockopedia - Sheng Siong Group Market Capitalisation Analysis, May 2025}

_{⁸ Stockopedia - AEM Holdings Market Capitalisation Analysis, May 2025}