Our Top Picks Today: Stocks | 20 February 2026

RE-ITERATE BUY

Keppel DC REIT (KDCREIT SP)

RE-ITERATE BUY

Hongkong Land Holdings Limited (HKL SP)

• AI capex cycle keeps the asset class tight, and DC landlords still price power scarcity. Industry data continues to point to a multiyear supply demand gap, increasingly driven by power constraints rather than just real estate availability. A recent JLL cited projection points to global data centre capacity expanding by 97GW from 2026 to 2030, effectively doubling sector capacity, with APAC capacity rising from 32GW to 57GW by 2030.

• Sponsor flywheel plus DPU accretive deployment remains the core rerating engine. The manager is explicitly scaling through hyperscale acquisitions and has guided to meaningful inorganic activity, citing about $1.1B of acquisitions including Tokyo Data Centre 3 and remaining interests in Keppel DC Singapore assets, and noting the remaining interests in Keppel DC Singapore 3 and 4 are expected to complete by 1Q26.

• Signs of a Hong Kong office floor are emerging, and the market is still sceptical. Management flagged improving enquiry levels in 1H25, with committed vacancy in the Central office portfolio down to 6.9% at end June and further to 6.4% by end September, meaningfully better than wider Central Grade A vacancy (11.8% in June and 11.0% in September).

• Singapore offices are quietly a stabiliser, while LANDMARK disruption is time bound. Singapore office vacancy is low and rental reversions remained positive, offering earnings ballast while Hong Kong offices work through negative reversions. Management disclosed 2.0% physical vacancy in Singapore at end June with average rents up YoY.

RE-ITERATE BUY

Hua Hong Semiconductor (1347 HK)

RE-ITERATE BUY

Chow Tai Fook Jewellery Group (1929 HK)

• China onshoring plus AI spillover keeps mature node demand tighter than feared. China’s domestic semiconductor supply chain is still in build mode, and demand is being pulled forward by local design houses, while AI driven memory tightness is also creating second order supply constraints elsewhere in the stack. Semiconductor Manufacturing International Corp is expanding capacity to meet strong demand, but flagged margin pressure from higher depreciation, which is a useful read through for the whole China foundry complex.

• ASP and mix are the real margin lever, not just volume. Management explicitly attributed FY25 gross margin expansion to improved ASP plus cost reduction, and highlighted strength in specialty platforms such as standalone NVM and power management.  A key macro tailwind is that memory being in high demand can tighten broader foundry capacity allocations, which can improve pricing for mature logic products at the margin.

• Demand Inflection. In the quarter ended 31 Dec 2025, Group retail sales value rose 17.8% YoY, with the Mainland up 16.9% and Hong Kong Macau plus other markets up 22.9%. Same store sales also turned decisively positive, up 21.4% in the Mainland and 14.3% in Hong Kong and Macau. This is a clear signal that discretionary appetite for jewellery is recovering even with a high gold price backdrop, which typically pressures unit volumes but supports ticket size.

• Offshore optionality is emerging as a credible second engine. The flagship store in Bangkok and plans on further store openings in Australia and Canada by end June 2026, with Middle East expansion targeted over the next two years are key progress to watch. This is strategically important because it gives the market a second narrative beyond Mainland store density and domestic consumption, and it can also help brand elevation, a key requirement for sustaining fixed price mix and pricing power.

BUY

Teekay Tankers Ltd. (TNK US)

RE-ITERATE BUY

Lockheed Martin Corp. (LMT US)

• Dirty tanker rates at 3-year highs drive earnings upside. The recent surge in tanker markets, with the Baltic Exchange Dirty Tanker Index hitting a three-year high of 1,743 points, reflects tightening vessel availability and elevated crude flows. Teekay Tankers is directly benefiting from this strength, with its Q4 spot rates averaging US$53,500/day for Suezmax and US$43,600/day for Aframax/LR2 vessels, rising further in 1Q26 to US$56,900/day and US$51,400/day respectively (for ~65% of booked days). With FY25 GAAP net income of US$351.2mn and continued strong spot momentum, Teekay Tankers remains highly levered to sustained rate strength in the mid-size crude segment.

• Geopolitical disruptions and sanctions boost compliant fleet demand. Escalating geopolitical tensions alongside tighter U.S. sanctions and shifting crude trade flows, are increasing tonne-mile demand and diverting cargoes away from the “dark fleet” toward compliant operators like Teekay. With ~20% of global oil supply moving through the Strait of Hormuz and heightened risks of disruption, oil trade inefficiencies are supporting mid-size tanker utilization and pricing. Combined with projected 1.1 mb/d global oil demand growth in 2026 and continued non-OPEC supply expansion, the company is positioned to benefit from structurally firm tanker fundamentals amid elevated geopolitical volatility.

• Rising global defence spending underpins long-term demand. Lockheed Martin is benefiting from elevated geopolitical tensions, including pressure for increased Taiwan defence spending, renewed focus on Middle East security, and broader great-power competition, which are translating into sustained government commitments to modernize and expand military capabilities. With the U.S. and allies earmarking more funds for advanced fighter jets, air defence systems, and integrated weapon suites, Lockheed’s diversified portfolio positions it to capture multi-year demand across air, naval, missile defence and space domains.

• Backlog strength, U.S. government support and global partnerships drive earnings visibility. Lockheed Martin’s upbeat 2026 outlook reflects strong backlog visibility, pricing power, and sustained support from the U.S. government through long-term defence programs, while disciplined execution on platforms such as fighter jets, missile defence, and naval systems underpins resilient cash flows. At the same time, strategic international partnerships, including its collaboration with Fujitsu on Japan’s SPY-7 radar program, expand its footprint in allied markets, diversify revenue streams, and embed the company into critical global defence supply chains.