3 Small Cap Stocks to Watch for January 2026

Core Insights - The Singapore market presents opportunities in the small-cap sector, particularly in AI, semiconductor demand, and green electrification [1] - Focus on companies with strong balance sheets and strategic partnerships to uncover potential growth [1] Company Summaries Micro-Mechanics (Holdings) Ltd - Reported a 2.9% YoY revenue increase to S$16.7 million for 1QFY2026, driven by a 7.9% growth in the consumable tools segment [3] - Maintained a net profit margin of 18.9% despite challenges in the wafer fabrication equipment segment [4] - Generated free cash flow of S$3.8 million and holds zero debt with S$27.2 million in cash [4] - Management is optimistic with industry forecasts predicting a 26.3% surge in 2026 [4] Digital Core REIT - Owns 11 data centres with US$1.7 billion in assets under management as of December 2024 [6] - Achieved an 83.9% YoY increase in gross revenue to US$132.4 million for 9M2025 [6] - Net property income rose 49.6% to US$67.7 million, despite higher finance costs limiting distributable income growth to 1.9% [7] - Trading at a 39% discount to net asset value, indicating potential value [7] - Maintains a conservative leverage of 38.5% with room for expansion [8] CSE Global - Reported an 8.7% revenue increase to S$698.6 million for 9M 2025, driven by a 12.4% rise in the Electrification segment [10] - Strategic partnership with Amazon allows for the acquisition of over 62 million shares, enhancing its role in the data centre sector [11] - Holds an order book of S$467.5 million, positioning the company as a key infrastructure provider [12] Investment Themes - All three companies align with long-term trends in their respective sectors, showcasing resilience and strategic foresight [13] - Micro-Mechanics emphasizes precision and financial discipline, Digital Core REIT offers value in AI infrastructure, and CSE Global focuses on strategic partnerships [13]