International Value Funds
International value funds are excellent investments for those who diversify their investments globally and enjoy undervalued stocks in international markets. The funds are disciplined because they only look for investment opportunities in companies that seem undervalued compared to their intrinsic value. Understanding international value funds for beginner investors opens the door to a broader range of opportunities beyond domestic borders.
This article delves into international value funds, their benefits, risks, and investment strategies. It also provides practical examples and answers to frequently asked questions.
Table of Contents
What are International Value Funds?
International value funds are mutual funds or exchange-traded funds (ETFs) that invest in undervalued companies outside the investor’s home country. These funds aim to generate long-term capital growth by identifying and investing in companies trading below their intrinsic value. International value fund managers rely on extensive research and valuation metrics to make informed investment decisions.
The core objective is to capitalise on market inefficiencies, such as undervalued stocks or untapped global markets, with a focus on geographic diversification.
Understanding International Value Funds
International value funds follow a popular investment philosophy called value investing, developed by legendary investors such as Benjamin Graham and Warren Buffett. Value investing involves identifying undervalued stocks using fundamental analysis and holding them until their true worth is realised.
Key principles include:
- Identifying undervalued stocks: Companies trading below their intrinsic value are identified through valuation metrics like price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and dividend yields.
- Focusing on long-term growth: It is about getting sustainable returns by targeting fundamentally strong companies.
- Risk Management Emphasis: Fund managers assess individual companies, sectors, or regions.
Distinctive Features of International Value Funds
Compared to other global funds, international value funds have several unique characteristics:
- Geographical Focus: Only investment in non-domestic markets.
- Value-Oriented Approach: Focus on finding undervalued stocks rather than diversification in general.
- Stability Focus: They focus on mid to large-cap companies with stable financials and strong market positioning.
Benefits of International Value Funds
International value funds have several advantages that make them an important addition to an investor’s portfolio. Below are the advantages in detail:
- Portfolio Diversification
International value funds give the investor geographical diversification as the investment is spread across various economies and sectors. This reduces dependence on a single market’s performance and thus reduces overexposure to risks associated with one economy or currency.
For example:
- Investing internationally balances an investor’s exposure to the global economic trend, helping reduce an investment’s volatility.
- In addition, it also allows access to growth opportunities in regions with healthy market conditions. For instance, one could invest in developed markets like Europe or high-growth emerging markets in Asia.
- Opportunity for High Returns
The value-driven approach of international value funds capitalises on market inefficiencies. Fund managers notice undervalued stocks with companies with strong fundamentals that are overlooked by a broader market.
- For instance, companies experiencing temporary setbacks have competitive advantages, and sound financials will offer attractive investment opportunities.
- This strategy is particularly powerful during periods of global recovery because undervalued stocks frequently rebound strongly, delivering much better long-term returns than typical investment strategies.
- Currency Exposure through Gains
Investment in international markets brings about currency exposure, often impacting returns. A rise in the foreign currency value of an investment against that of the investor’s domestic currency usually increases returns while adding a second layer of profit.
- Exposure to several currencies also provides an opportunity for protection against domestic currency devaluation risks; it thus adds more security when the currencies depreciate.
- Wider Economic Involvement
Investing globally diversified economic cycles for investors. For example:
- Some industries, such as technology or renewable energy, may do well in international countries even when the domestic economy lags.
- This opens up more opportunities for investors, especially in high-growth regions, which makes portfolios more robust.
As such, international value funds are a great way to achieve financial stability and steady growth.
Risk Factors in International Value Funds
International value funds have many benefits but, of course, carry inherent risks. These risks must be understood before investment decisions are made.
- Currency Risk
Currency fluctuation is one of the biggest risks in international value funds. When an investor holds assets in a foreign currency, any depreciation in that currency relative to their home currency reduces returns.
For example, suppose an international investment is made with the USD. A strengthening USD against the currency in question may reduce the value of the investment in USD terms, even though a stock price in its own currency has not moved at all. Conversely, it can magnify profits while being difficult to predict.
- Political and Economic Unrest
Global markets are sensitive to political and economic events. Geopolitical risks include trade disputes, changes in regulations, or political instability in some countries that affect the valuations of firms in other countries. Stock price crashes may occur due to sanctions or changes in policy of unknown nature in developing countries.
- Market Volatility
Compared to the domestic economy, which is mostly in developing countries’ economies, markets in global economies are very volatile. At times, prices might fluctuate wildly, at instances due to economic slowdowns, natural disasters, or just unexpected overnight changes in the commodity price, adversely affecting the performance of such a fund.
- Regulatory Accounting Difference
Every country has its own regulations and accountancy environment, which may make it difficult to judge a company’s financial situation correctly and increase the possibility of misjudging.
- Liquidity Constraints
Some international markets are illiquid, and a fund manager will find it challenging to buy or sell a large position without affecting the stock price. This may delay trade execution, and the results will not be ideal in times of volatility.
Examples of International Value Funds
Let’s take a look at two of the more prominent international value funds that reflect the traits and strategies of this type of investment:
- Dodge & Cox International Stock Fund (United States)
The Dodge & Cox International Stock Fund is a strong international value strategy. This US-based fund invests mainly in the undervalued equities of non-US firms operating in various industries and regions. The fund uses a disciplined and research-based approach to identify high-potential stocks that trade at a discount to intrinsic value.
For example, it has previously focused on undervalued technology companies in Europe and providers of financial services in Asia, targeting companies with stable balance sheets and competitive strength. Its long-term approach allows it to capture global market inefficiencies while diversifying sectorally and geographically.
- LionGlobal Disruptive Innovation Fund (Singapore)
The LionGlobal Disruptive Innovation Fund is a Singapore-based international value fund that offers exposure to undervalued companies benefiting from disruptive trends worldwide. While the fund is mainly growth-oriented, it does include value-based metrics to find overlooked opportunities in sectors like healthcare and renewable energy.
For instance, it invests in the underpriced medical technology companies of North America and the renewable energy firms in Europe, exposing it to transformative global trends. The fund runs on sustainable growth by balancing high-return opportunities with risk management.
These examples reflect other markets in which international value funds function and provide an avenue to investors who can afford undervalued stocks even while managing risks strategically.
Frequently Asked Questions
International value funds often use different investment methods, like fundamental analysis to find mispriced businesses. They emphasise financial health and competitive positioning factors and will consider growth ability. They also consider macro factors and currency and make investment choices accordingly.
These funds usually diversify into technology, health, financial services, energy, and consumer goods. Depending on where value opportunities are found regionally, they can invest in developed markets such as Europe and Japan and emerging markets of Asia and Latin America.
The evaluation includes historical performance, expense ratios, fund manager expertise, investment philosophy, risk-adjusted returns, portfolio holdings, and liquidity. All these factors can be guidelines if compared with similar funds so that a proper investment decision will result.
These would include worldwide economic factors, such as growth rates, interest rates, inflation, currency exchange rates, geopolitical events, and commodity prices, that could significantly impact international value funds’ performance, whether by risk or return.
Emerging markets might be a haven for investments with high growth potential and undervalued assets, which would then diversify the portfolio. On the other hand, emerging markets usually come with a higher risk of political instability and market volatility that investors need to consider.
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Phillip SING Income ETF Reaches All-Time High Dividend with Banking Sector Focus
Brief Overview Phillip Securities Research maintains an ACCUMULATE recommendation on Phillip SING Income ETF (SINGINC) with an increased target price of S$1.82, up from the previous S$1.59. The ETF has experienced portfolio rebalancing with increased banking sector concentration, while DBS Group and Singapore Exchange remain key holdings alongside new top holding Oversea-Chinese Banking Corporation. The firm remains constructive on SINGINC as its dividend reaches an all-time high, supported by stronger distributions from the portfolio. Investment Positives The primary strength of SINGINC lies in its dividend performance, which has reached an all-time high. This achievement is underpinned by stronger distributions from the portfolio, particularly benefiting from the ETF's large exposure to Singapore banks. The ETF demonstrates strong diversification across six sectors, with financials representing the largest allocation at 44.2% and REITs comprising 21.8% of the portfolio. This diversified approach provides balanced exposure across Singapore's key income-generating sectors. Recent portfolio changes reflect strategic positioning towards Singapore's banking sector. Oversea-Chinese Banking Corporation has become the largest holding at 11.4%, while DBS Group's weight increased slightly from 10.3% to 10.7%. This greater concentration in Singapore's banking sector among the portfolio's largest positions, places the ETF to benefit from the sector's performance. Looking ahead, resilient bank earnings and dividends are expected to continue supporting income generation. Additionally, a more favourable interest-rate environment for REITs should enhance the performance of the ETF's second-largest sector allocation. Outlook Phillip Securities Research maintains a constructive outlook on SINGINC. The combination of resilient bank earnings and dividends, alongside a more favourable interest-rate environment for REITs, should continue supporting income generation. Singapore's market revitalisation initiatives are expected to provide an additional catalyst for performance. Recommendation & Target Price Phillip Securities Research maintains an ACCUMULATE recommendation on Phillip SING Income ETF. The target price has been increased to S$1.82 from the previous S$1.59, derived using equal weightage between historical dividend yield spread valuation (S$2.20) and price-to-earnings ratio valuation (S$1.44). Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Phillip Securities Sees Singapore Banks Delivering Robust Performance Despite Margin Pressures
Brief Overview Phillip Securities Research highlights that Singapore interest rates climbed for the third consecutive month in July, with loan growth surpassing 9% year-on-year for the first time since COVID. The firm's second quarter 2026 bank earnings analysis shows performance exceeded expectations, driven by record fee and trading income, despite continued net interest income (NII) declines. The research house maintains its positive stance on the sector while acknowledging mixed guidance updates from major banks. Investment Positives The team identifies several compelling reasons for optimism in Singapore banking. Loan growth has become a significant positive catalyst, crossing the 9% year-on-year threshold for the first time since the pandemic, with June 2026 recording 9.2% growth. This volume of expansion is compensating for what interest margins cannot deliver, representing a fundamental shift in the growth dynamic. Record fee and trading income performance stands out as key earnings drivers. These non-interest revenues more than offset another quarter of declining NII during the second quarter of 2026, with the analyst expecting this trend to continue delivering results through the second half of 2026. CASA deposits demonstrated robust growth of 16% year-on-year, maintaining the CASA ratio at 20.6% of total deposits. This performance is particularly valuable as it keeps funding costs contained despite the challenging interest rate environment. DBS and OCBC have raised their full-year 2026 earnings guidance, signalling management confidence in their business outlook. OCBC specifically increased its loan growth guidance, reinforcing the positive volume of momentum across the sector. The analyst notes that banks' dividend yields remain attractive at 4.0% for FY26e, supported by share buyback programmes and capital return dividends that bolster return on equity. Investment Negatives Net interest margins continue to face pressure, declining 17-22 basis points across the three major banks during the quarter. This margin compression represents an ongoing headwind that volume growth is working to offset rather than eliminate. The Monetary Authority of Singapore's policy tightening on 27 July, which steepened the Singapore dollar NEER appreciation slope to around 1.25% from approximately 1.00%, creates a counteracting force against rising SORA rates. A stronger Singapore dollar works to lower SGD rates, potentially capping the net interest margin recovery rather than reversing the decline. The Monetary Authority of Singapore's policy tightening on 27 July, which steepened the Singapore dollar NEER appreciation slope to around 1.25% from approximately 1.00%, creates a counteracting force against rising SORA rates. A stronger Singapore dollar works to lower SGD rates, potentially capping the net interest margin recovery rather than reversing the decline. UOB reduced its fee growth guidance to low single digits from previously high single digits, indicating some uncertainty around non-interest income sustainability across all institutions. The analyst expects NII to turn positive year-on-year only towards the fourth quarter of 2026, suggesting continued near-term pressure on this core revenue stream. Outlook The research suggests SORA will hold around current levels through the second half of 2026 rather than climb further, limiting the scope for significant margin expansion. However, the combination of strong volume growth and robust non-interest income is expected to support overall earnings momentum. Recommendation & Target Price Phillip Securities Research maintains an ACCUMULATE recommendation on Singapore banks. The firm expresses preference for DBS, citing its fixed dividend per share policy and raised FY26e guidance, and OCBC, highlighting wealth management momentum and remaining capital return potential. No specific target prices are provided in the report. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Soilbuild Construction Maintains Strength Despite Project Delays
Brief Overview Soilbuild Construction Group Ltd delivered mixed 1H26 results with revenue and profit below expectations, primarily due to significant delays in precast project recognition. However, the company demonstrated resilience with 25.8% year-on-year profit growth driven by strong construction segment performance and margin expansion, whilst maintaining its dividend appeal through increased payout ratios. Investment Positives The standout positive for TeleChoice centres on the strong momentum in its PCS division. PCS revenue grew an impressive 25% year-on-year in 1H26 to S$205mn, whilst profit before tax spiked 140% to S$6.1mn. This growth was driven by U Mobile's expansion in mobile subscribers, with handset demand receiving additional support from promotional activities and increased subsidies as more consumers transition from prepaid to postpaid plans. Margin performance proved particularly impressive, with 1H26 net margins expanding by 1.9 percentage points year-on-year to 12.3%. This represents an 8.2 percentage point premium over average local peers' net margins of 4.1%, achieved through operational scale benefits and timely project deliveries. The company's balance sheet strength improved markedly, with 1H26 net cash turning positive to S$138 million compared to 1H25 net debt of S$0.6 million. This transformation was driven by 18% year-on-year higher operating cash flow to S$56.5 million, whilst receivables fell S$30.7 million half-on-half, freeing up working capital. Shareholder returns increased substantially through a higher dividend payout ratio. The proposed interim dividend of 1.6 cents per share represents a 2.2 times year-on-year increase from 0.5 cents per share in 1H25. The 1H26 dividend payout ratio increased by 18 percentage points year-on-year, supported by the stronger balance sheet. Investment Negatives Precast segment performance presented challenges, with revenue declining 59% to S$24.2 million due to project recognition delays. Many precast projects remained in the design phase, creating timing differences that impacted overall revenue achievement. Order book size decreased to S$800 million from S$1.19 billion in 1H25, representing a 32.8% decline following progress on major projects with exceptional scale, reducing visibility for future performance. Outlook Production is expected to ramp up in 2H26 and into 1H27 as precast projects advance beyond the design phase. Higher industrial demand is anticipated as 29% more industrial land is released from the Industrial Government Land Sales programme for 2H26. The company is expected to gradually win more tenders and expand its order book size beyond S$1 billion. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation with an unchanged target price of S$1.20. The valuation multiple was lowered from 9 times to 8.5 times FY27 price-to-earnings ratio to reflect lower visibility from the smaller order book. The company trades at an FY26 dividend yield of approximately 6.2%. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
UltraGreen.ai – One small step for rival, no giant leap
Brief Overview Zydus Lifesciences announced on 4 Aug 26 that it had secured 180-day Competitive Generic Therapy exclusivity from the FDA for a generic ICG dye, introducing the first credible competitor to UltraGreen.ai's US franchise. UltraGreen.ai's share price dropped 30.7% yesterday following this news. Despite this development, Phillip Securities Research believes the FDA approval for Zydus is not an imminent threat to UltraGreen.ai. Investment Positives Several factors support UltraGreen.ai's defensive position against new competition. The company has established significant operational advantages that will be difficult for new entrants to replicate quickly. UltraGreen.ai has spent years building its current capacity of approximately 3 million vials per year, supported by exclusive evergreen API contracts, dedicated lyophilisation capacity and a multi-contract manufacturing organisation network. The company benefits from established market relationships that new competitors must develop from scratch. New entrants need to establish hospital and group purchasing organisation relationships, whilst hospitals have little incentive to switch from a proven supplier. UltraGreen.ai's competitive moat is reinforced by its focused approach and integrated platform. ICG is the company's sole product focus, unlike diversified generics players such as Zydus Lifesciences. The company's position is further strengthened by its camera and software platform, and by a regulatory dossier built over 15 years. Additionally, the 180-day CGT exclusivity that Zydus has secured actually blocks other generic makers from using the Abbreviated New Drug Application pathway to get approval, limiting future competitors from entering the market for that period. UltraGreen.ai will continue to sell ICG vials in the US during this exclusivity period. Investment Negatives The primary concern is aggressive pricing competition from new entrants. There is a risk that Zydus may compete aggressively on price, undercutting the market significantly to gain market share. This potential pricing pressure has led to reductions in earnings forecasts, with FY26e and FY27e PATMI reduced by 3% and 6% respectively to account for this risk. Outlook Whilst competition has emerged, the analyst believes UltraGreen.ai's established infrastructure and market position provide significant defensive advantages. The company's focused approach to ICG, combined with its integrated platform and long-established regulatory dossier, should help maintain its market position despite new competition. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation for UltraGreen.ai with a lower DCF-based target price of US$1.81, reduced from the previous US$1.91. The company trades at an FY26e P/E of 9.9x. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
TeleChoice International Ltd – Growth Accelerating
Brief Overview TeleChoice International reported strong 1H26 results that exceeded expectations, with revenue and PATMI representing 52% and 59% of full-year forecasts respectively. PATMI surged 87% year-on-year to S$4.9mn, driven primarily by the company's 4PL handset supply chain management (PCS) business supporting U Mobile's subscriber growth. The company maintained its BUY recommendation with an unchanged target price of S$0.33. Investment Positives The standout positive for TeleChoice centres on the strong momentum in its PCS division. PCS revenue grew an impressive 25% year-on-year in 1H26 to S$205mn, whilst profit before tax spiked 140% to S$6.1mn. This growth was driven by U Mobile's expansion in mobile subscribers, with handset demand receiving additional support from promotional activities and increased subsidies as more consumers transition from prepaid to postpaid plans. The analyst believes U Mobile's 5G network coverage, network quality, retail presence, and digital touchpoints have spurred strong subscriber growth and supported handset demand. This has directly benefited TeleChoice's handset supply chain management operations, with higher handset promotional activity and increased subsidies contributing to higher conversion rates of postpaid subscribers. The growth trajectory for PCS remains impressive, with the major customer U Mobile pursuing an aggressive strategy to increase market share through its differentiated 5G network infrastructure. Additionally, the network engineering and ICT divisions are showing signs of turnaround, though with some constraints. Investment Negatives The primary concern lies in the weakness observed in TeleChoice's ICT and Network Engineering Services (NES) divisions. The ICT segment suffered a 5% decline in profit before tax, attributed to intense competition and shrinking customer budgets. The division's margin pressure is further evidenced by lower-margin hardware sales now accounting for 56% of ICT revenue, compared to 47% in 1H25. The NES division faces margin decline due to the weak Indonesian rupiah, which has impacted the profitability of operations in that market. There was also no update provided on the data centre project in Malaysia during the reporting period. Outlook The analyst maintains an optimistic outlook, particularly regarding the PCS division's growth potential. Digital infrastructure and data centres remain key priorities to support the next phase of growth. Expanding into data centre projects remains a critical focus, though this is currently pending resolution of regulatory and infrastructure bottlenecks in Malaysia. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation for TeleChoice International with an unchanged target price of S$0.33, which is in line with the system integration sector. The FY26 PATMI forecast remains unchanged. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. 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CNMC Gold Maintains Buy Rating Despite Production Headwinds, Target Price Cut to S$2.03
Phillip Securities Research has maintained its BUY recommendation on CNMC whilst cutting its target price to S$2.03 from S$2.34, as higher gold prices help offset declining production volumes from the company's mining operations. Company Overview CNMC operates gold mining activities with fine gold comprising approximately 76% of its total revenue. The company is currently undertaking a significant US$12 million underground mine construction project at New Found and Manson's Lode, targeted for completion by the end of 2027. Strong Financial Performance Despite Volume Challenges The company demonstrated resilient financial performance in the first half of fiscal 2026, with revenue increasing 23.4% year-on-year to US$65.2 million and profit after tax and minority interests rising 17.8% to US$18.6 million. This growth was primarily driven by a substantial 40% increase in fine gold's average selling price to US$4,486 per ounce. Key Positives Supporting Performance Fine gold revenue, which represents the company's largest revenue stream, surged 31% year-on-year to US$49.8 million despite lower production volumes across all metals. The significant price appreciation in precious metals proved crucial, with gold prices rising 40% and silver prices increasing by an impressive 95% year-on-year. This pricing strength successfully offset the negative impact of reduced mining volumes. The underground mine construction project continues to progress according to schedule, with both the hoisting system and surface infrastructure already completed at New Found and Manson's Lode sites. The next phase involves shaft excavation as part of the comprehensive development programme. Operational Challenges and Revised Outlook However, the company faces production headwinds from lower-grade ore extraction through open-pit mining operations. This has prompted Phillip Securities Research to reduce its fiscal 2026 earnings forecast by 18%, reflecting a 7% reduction in the gold average selling price assumption to US$4,500 per ounce and a 16% decline in expected production volume to 23,957 ounces. The mining operations also contend with higher diesel prices and the challenge of spreading fixed costs over lower output levels, which impacts operational efficiency. CNMC currently trades at 11.7 times forward fiscal 2026 price-to-earnings ratio. The valuation methodology excludes terminal value assumptions, with the analysis based on the mining permit's validity through 2034. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. 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Strong Half-Year Performance Underpins Income Visibility United Hampshire US REIT (UHREIT), a defensive real estate investment trust focused on grocery, necessity retail, and self-storage properties in the United States, has delivered a solid first-half performance that reinforces its position as an income-focused investment. The REIT reported net property income of US$25.5 million for 1H26, representing a 6.4% year-on-year increase, whilst distribution per unit grew 3.3% to 2.16 US cents. Phillip Securities Research has reiterated its BUY recommendation with an unchanged dividend discount model-based target price of US$0.69, highlighting the trust's strong income visibility and attractive current trading yield. Operational Excellence Drives Performance The company's performance was bolstered by several key operational achievements and strategic acquisitions. New lease commencements, rental escalations, and contributions from recently acquired properties Dover Marketplace and Wallingford Fair Shopping Centre, purchased in August 2025 and January 2026 respectively, drove the distributable income growth. However, this was partially offset by higher finance costs resulting from additional borrowings used to fund these acquisitions. Strong Fundamentals Support Defensive Appeal UHREIT's defensive characteristics remain firmly intact, with grocery and necessity properties maintaining exceptionally high occupancy at 97.6%, demonstrating the resilient nature of essential retail properties. The self-storage segment showed notable improvement, with occupancy rising 430 basis points to 93.5%, driven by the peak spring leasing season. Average quarterly net rental rates remained healthy across the portfolio, with Millburn Self-Storage showing slight increases whilst Carteret Self-Storage rates remained broadly stable. The trust signed 260,000 square feet of leases during the first half at positive rent reversion, underlining strong tenant demand. A significant competitive advantage lies in UHREIT's limited near-term leasing risk, with only 0.6% and 4.6% of grocery and necessity leases expiring in FY26 and FY27 respectively. Improving Financial Metrics Financial management continues to strengthen, with the all-in cost of debt improving to 4.89% from 5.13% year-on-year and expected to decline further to 4.7% in FY26. The trust maintains 71.5% of debt on fixed rates, providing protection against interest rate volatility. Aggregate leverage improved to 40.4% and is projected to decline to approximately 37% following the divestment of BJ's Quincy. UHREIT currently trades at an attractive FY26 estimated dividend yield of 8.8%, supported by a long weighted average lease expiry of 7.9 years and high tenant retention rate of 90%. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. 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Centurion Corporation Maintains Strong Growth Trajectory with BUY Rating and S$1.94 Target Price
Centurion Corporation Ltd (CCL), a leading provider of purpose-built worker accommodation (PBWA) and student accommodation across Singapore, Malaysia, Australia, and the UK, has demonstrated robust growth momentum in its 1H26 results. The company operates a diversified portfolio of accommodation assets serving both migrant workers and students across multiple markets. Strong Revenue Growth Driven by Strategic Acquisitions CCL's revenue performance has been particularly impressive, with first-half 2026 revenue surging 31% year-on-year to S$184.9 million, marking the company's strongest growth since the first half of 2022. This exceptional performance was primarily driven by a series of strategic acquisitions and asset enhancement initiatives across key markets. The revenue acceleration reflects several major acquisitions that have significantly expanded CCL's capacity. The company acquired an additional 55% stake in the 8,006-bed Westlite Mandai Purpose-Built Workers' Accommodation (PBWA) facility, representing 19% of Singapore's capacity. In Malaysia, CCL acquired the 7,083-bed Harum Megah PBWA, adding 20% to the country's capacity. The Australian market saw the addition of the 732-bed EPIISOD Macquarie Park facility, which boosted Australia's PBSA capacity by 82%. Beyond acquisitions, ongoing asset enhancement initiatives have contributed substantially to growth. These projects added 5,460 beds, representing a 13% increase in Singapore capacity through expansions at Westlite Toh Guan and Westlite Mandai PBWA facilities, which are currently in the occupancy ramp-up phase. Market Dynamics Signal Continued Demand A significant positive development for CCL came through securing a three-year lease extension from JTC for the 1,224-bed Westlite Tuas Avenue 2 quick build dormitory, with options for an additional 3.5-year extension. This extension indicates a shortage of worker dormitories in Singapore, particularly given the progress of major construction projects including Changi Terminal 5, Marina Bay Sands Integrated Resort, healthcare facilities, and Cross Island Line construction. Investment Outlook and Guidance Phillip Securities Research maintains a BUY recommendation with an upgraded target price of S$1.94, increased from the previous S$1.85. The revised valuation incorporates CCL's 7,000-bed Kranji Close PBWA project and improved quick build dormitory valuations. CCL has provided forward revenue guidance of S$190 million for the second half of 2026, representing 22% year-on-year growth, with total beds expected to grow at a 5% compound annual growth rate through 2028. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. 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