Pension Funds

Pension funds are investment products that help individuals receive financial security after retirement. Contributions from employers, employees, or even both are accumulated and invested into a diversified portfolio for returns. In this post, we delve into the pension fund world, including its definition, types, investment strategy, benefits, and challenges.

Table of Contents

What are Pension Funds?
Understanding Pension Funds
Types of Pension Funds
Pension Fund Investment Strategies
Examples of Pension Funds
Types of Pension Funds Benefits
Factors Affecting Pension Funds Benefits
Pension Funds' Regulatory Environment
Technology and Digital Transformation in Pension Funds
The Future Trends
Conclusion
Frequently Asked Questions

What are Pension Funds?

A pension fund is an investment fund that provides retirement benefits to its members. It is a trust fund formed by an employer or a group of employers to provide pension benefits to their employees. The board of trustees or professional investment manager administers the fund, investing the contributions in different assets, including stocks, bonds, and real estate.

Understanding Pension Funds

Pension funds are normally operated based on defined benefit or defined contribution plans. A defined benefit plan is when the employer provides a benefit promised to pay after retirement to an employee based on a formula established for his pay and years of service. Under a defined contribution plan, the employer makes certain contributions to the employee’s pension account; hence, the benefits payable will depend on the return generated from investing that money.

Types of Pension Funds

Some common pension fund types are as follows:

Benefit (DB) Plans:

Guaranty a specific payout upon retirement based on a formula considering salary and years of service. Such funds give employees a specific amount at the time of retirement.

Example: Traditional corporate pension plans in the US.

Advantages: Predictable income stream.

Challenges: High liability for employers due to uncertain future costs.

Defined Contribution (DC) Plans:

Contributions are defined, but the payout depends on investment performance. This type of fund contributes a fixed amount to employees’ pension accounts, and the benefit amount is based on investment returns.

Examples include 401(k) plans in the US and the CPF Investment Scheme (CPFIS) in Singapore.

Advantages: Lower risk for employers and flexibility for employees.

Challenges: Payouts depend on investment choices and market conditions.

Hybrid Plans:

Combine features of DB and DC plans. This type of fund combines elements of DB and DC plans.

Example: Cash balance plans in the US.

Advantages: Balanced risk-sharing between employers and employees.

Challenges: Complex implementation and management.

Public Pension Funds:

Managed by governments to provide benefits to public sector employees. Governments establish these funds to provide pension benefits to public employees.

Examples: The Singapore CPF and the California Public Employees’ Retirement System (CalPERS).

Advantages: Stability and wide coverage.

Challenges: Vulnerability to demographic and economic shifts.

Pension Fund Investment Strategies

Pension funds utilise several investment strategies to achieve returns for their liabilities. Some of the strategies include;
Asset Allocation: Pension funds allocate the assets they have to different classes, such as equities, bonds, and real estate.
Diversification: The pension funds diversify their portfolios to minimise risks for achieving greater returns.
Active Management: Pension funds employ active managers to manage their assets and generate returns.
Passive Management: Pension funds use passive managers in benchmark tracking concerning generating returns.

Examples of Pension Funds

For Singapore

Central Provident Fund (CPF): A mandatory savings scheme covering retirement, healthcare, and housing needs. CPF is a multi-purpose fund that provides financial security through its comprehensive coverage.

For U.S

CalPERS: It is one of the largest public pension funds, serving California public employees. It is known for its diverse investment portfolio and significant influence in the market.

Teachers Insurance and Annuity Association of America (TIAA): It is a leading private pension fund for educators that offers retirement solutions tailored to the academic community.

Types of Pension Funds Benefits

Defined Benefit (DB) Plans: Promise a certain benefit amount to employees upon retirement, based on a formula that considers salary and years of service.
Defined Contribution (DC) Plans: Contribute a fixed amount to employees’ pension accounts, and the benefit amount is based on investment returns.
Lump Sum Payments: A one-time payment to retirees or beneficiaries.
Annuity Payments: Periodic payments to retirees or beneficiaries for a fixed period of life.

Factors Affecting Pension Funds Benefits

Vesting Schedule: The schedule by which employees become fully vested in their benefits.
Accrual Rate: The rate at which employees accrue benefits over time.
Investment Returns: The benefit amount in DC plans is affected by investment returns.
Inflation: Reduces the purchasing power of pension benefits.

Pension fund accounting and reporting requirements ensure transparency and accountability in the management of pension funds.

Accounting Standards

Financial Accounting Standards Board (FASB): Provides pension fund accounting and reporting guidance for private sector employers.

Governmental Accounting Standards Board (GASB): Provides guidance on pension fund accounting and reporting for public sector employers

Reporting Requirements

Annual Financial Reports: Pension funds must submit annual financial reports to regulatory agencies and stakeholders.
Actuarial Valuations: Pension funds should carry out actuarial valuations to know their funding position.
Disclosure Statements: Pension funds are required to prepare disclosure statements for participants and beneficiaries.

Economic factors can greatly influence pension funds’ funding position, investment returns, and ability to pay benefits.

Pension Funds' Regulatory Environment

The regulatory environments of the US and Singapore ensure that pension funds operate with the utmost transparency and accountability.

US: The ERISA legislation ensures strict standards for fiduciary responsibility, reporting, and plan management. Other supplemental oversight mechanisms include the SEC and the Department of Labour.
Singapore: The CPF Act regulates the Central Provident Fund, investing contributions wisely. The rules require periodic reporting and auditing to safeguard members’ savings.

Technology and Digital Transformation in Pension Funds

Technology is transforming the management and running of pension funds.

Automation: Automates routine administrative work, thus saving on operational costs.
Blockchain: Increases transparency in transactions and minimises fraud.
AI and Analytics: Provides predictive insights, which aid better investment decisions.
Mobile Access: CPF Mobile is a smartphone application for easy monitoring and management of funds in Singapore.

The Future Trends

Old and New Pension Fund Management Evolve To Face Challenges and Opportunities

Sustainability is an integral part of investment through ESG
Flexible retirement solutions focussing on variegated retirement needs
Cryptocurrency investments as part of diversification plans.
Fund strategies are being altered because of changes in global trade and economic policies, limiting risks and finding opportunities.

Conclusion

Pension funds are critical to ensuring financial stability during retirement in the US and Singapore. While each market has unique characteristics, the underlying principles of sustainability, prudent investment, and regulatory oversight remain consistent. By understanding the nuances of pension funds, individuals and policymakers can better navigate the complexities of retirement planning. Expanding awareness and adaptability will ensure these funds provide secure futures for retirees in an ever-changing economic landscape.

Frequently Asked Questions

What are the Pension Fund Benefits and Distributions?

The type of plan determines the benefits and distributions from a pension fund. A DB plan is one in which the employer promises to pay an employee a certain amount of money at retirement. In a DC plan, the employee receives a lump sum or annuity payments based on the investment returns earned by the fund.

What are the Pension Fund Accounting and Reporting?

Pension funds must also adhere to specific accounting and reporting standards such as those set forth by FASB and GASB. These usually demand that pension funds disclose their financial statements, investment returns, and funding status.

What is the Impact of Economic Factors on Pension Funds?

Economic factors that affect pension funds include interest rates, inflation, and market volatility. Changes in interest rates can impact pension funds’ funding status, while inflation can erode the purchasing power of pension benefits. Market volatility can also impact investment returns and funding levels.

What is the Comparison of Pension Funds to Other Retirement Plans?

Pension funds are very different from other retirement plans, such as 401(k) plans and individual retirement accounts (IRAs). The structure of funding and benefit promises vary between the two. Pension funds are primarily funded by employers, while 401(k) plans and IRAs are funded by employees.

What do Pension Funds face the Challenges?

Pension funds face many challenges, some of which are:

Funding shortfalls: Many pension funds face funding shortages due to inadequate or insufficient contributions, investment loss, or changing demographic assumptions.
Investment risk: Pension funds can be subject to investment risks, including fluctuations in market risk and credit risks.
Regulatory requirements: These funds are generally subject to rules on funding, disclosure, and other matters.
Changes in demographics: Pension funds often have to reflect demographic changes, including rising lifespans and plummeting birthrates.

Related Terms

Other Terms

Know More about

Margin Trading

Bond Trading

Securities Lending

Supplementary Retirement Scheme

Money Market Funds

REITs ETF

Singapore Stocks

Opening Investment Account

Tools/Educational Resources

Markets Offered by POEMS

Read the Latest Market Journal

Understanding Emerging Markets ETFs

Published on Aug 13, 2026 16

An Emerging Markets ETF (Exchange-Traded Fund) is a pooled investment vehicle that invests primarily in stocks from fast-growing, developing economies across Asia, Latin America, Eastern Europe, and Africa. While some Emerging Markets ETFs track broad global indexes to cover dozens of countries at once, others target specific regions, themes, single countries, or investment factors. Additionally, investors can choose between: Passive ETFs: Designed to track the performance of a specific benchmark index. Active ETFs: Managed by portfolio managers who actively select and adjust holdings to seek outperformance. (To learn more, read our guide on What is an Active ETF?) 1. Why Invest in Emerging Markets ETFs? Higher Long-Term Growth Potential Developing economies like Brazil, China, and India are widely recognised for their structural economic tailwinds. These include expanding middle-class demographics, rapid urbanisation, massive infrastructure development, and accelerating technological adoption. According to projections by S&P Global, emerging markets are expected to contribute approximately 65% of global economic growth by 2035. Historically, these economies have expanded at a significantly faster pace than developed nations. Between 2015 and 2025, emerging markets recorded a 10-year GDP compound annual growth rate (CAGR) of ~5.8%, compared to a more modest 2.0% CAGR for developed markets (Figure 1.1). This growth differential highlights the powerful momentum underlying developing economies. Fig 1.1 World Economics as of June 2026 High Allocation to Next-Gen Technology & Innovation A prominent example of a broad market vehicle is the iShares MSCI Emerging Markets ETF (EEM). Beyond traditional industrial sectors, a significant portion of EEM's portfolio is allocated to high-growth technology-related sectors (47.37%) (Figure 1.2). This weighting reflects the rapid digital transformation occurring across developing economies, where domestic champion firms dominate e-commerce, semiconductor fabrication, digital payments, and consumer platforms. Fig 1.2 iShares MSCI Emerging Markets ETF (EEM) Sector Allocations as of 4 June 2026 Strategic Global Supply Chain Positioning Geographically, funds like EEM feature high concentrations in key Asian growth hubs—notably China (28.82%), Taiwan (21.97%), and India (15.20%) (Figure 1.3). Fig 1.3 iShares MSCI Emerging Markets ETF (EEM) Country Breakdown as of 4 June 2026 While markets like Taiwan and South Korea provide vital advanced tech manufacturing (such as leading-edge semiconductors), other emerging nations, like Brazil, Indonesia, and Saudi Arabia, possess rich deposits of essential natural resources (e.g., copper, lithium, nickel, and crude oil). Together, these economies form critical backbones for both global manufacturing supply chains and the ongoing energy transition. 2. Recent Performance & Expense Breakdown ETF Name Type 1-Year Return Expense Ratio iShares MSCI Emerging Markets ETF (EEM) Emerging Market 34.69% 0.72% State Street SPDR S&P Emerging Asia Pacific ETF (GMF) Emerging Market 19.52% 0.49% iShares MSCI Emerging Markets ex China ETF(EMXC) Emerging Market 50.58% 0.25% iShares Core MSCI International Developed Markets ETF (IDEV) Developed Market 25.48% 0.04% Data as of 31 July 2026. Note: Past performance is not indicative of future results. Performance Context Over the measured 1-year period, broad developed market benchmarks generated moderate returns (with the S&P 500 returning 19.53% and IDEV returning 25.48%). In contrast, targeted Emerging Markets ETFs significantly outperformed their developed market peers. This outperformance demonstrates how capital inflows can surge into developing markets during periods of favourable economic policy, industrial expansion, and earnings acceleration. Understanding Cost Differentials Despite higher return potential, Emerging Market ETFs generally charge higher expense ratios than core US or developed market funds. Operating across multiple developing jurisdictions introduces` higher operational costs, including: Foreign exchange handling and currency conversions Differing local tax structures and custody fees Lower underlying market liquidity or wider local bid-ask spreads Complex regulatory compliance across multiple jurisdictions Investors are essentially paying a small premium to outsource the operational complexity of building a cross-border emerging market basket manually. 3. Key Risks to Consider While the upside trajectory can be compelling, emerging market assets carry elevated risk profiles: Political and Regulatory Risk: Developing markets can experience abrupt policy shifts, regulatory revisions, trade barriers, or geopolitical friction that may impact corporate earnings or access to capital. Currency (FX) Volatility: Because these funds hold assets denominated in foreign currencies (e.g., BRL, INR, TWD, KRW), returns are subject to exchange rate fluctuations. If an emerging market currency depreciates against your home currency, it can erode or neutralise underlying stock gains. Liquidity and Market Volatility: Smaller or less developed local exchanges can suffer from liquidity dry-spells during broader global risk-off events, leading to higher price volatility. 4. Investor Checklist: Evaluating an Emerging Markets ETF Before allocating capital to an Emerging Markets ETF, review the fund's Factsheet for the following indicators: Benchmark Index: Identify what the fund tracks (e.g., MSCI Emerging Markets Index vs. FTSE Emerging Index—note that FTSE classifies South Korea as a developed market, whereas MSCI classifies it as emerging). Country & Sector Concentration: Check whether the fund is overweight in a single nation (e.g., heavy China exposure) or concentrated in a single sector (e.g., technology). Top Holdings: Review the top 10 positions to assess single-stock concentration risk. Tracking Error: Measure how accurately the fund replicates its underlying index performance over time. Trading Volume & Bid-Ask Spread: Look for higher average daily trading volume and tighter bid-ask spreads to ensure cost-efficient trade execution on the exchange. 5. How Singapore Investors Can Incorporate Emerging Markets ETFs 1. Portfolio Diversification Adding Emerging Markets ETFs to a portfolio dominated by US or domestic Singapore equities helps lower overall portfolio concentration risk. Because developing markets operate on distinct economic cycles, their returns often exhibit lower correlation with developed markets over long horizons. 2. Intraday Liquidity vs. Mutual Funds Compared to traditional unit trusts or mutual funds, which settle only once per day at the official Net Asset Value (NAV), ETFs trade live on stock exchanges throughout market hours. This offers investors immediate pricing transparency, continuous execution flexibility, and better tactical timing for entry and exit points. 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.

A-Sonic Aerospace Scales Up Operations with Strategic JGL Group Acquisition for Enhanced Growth

Published on Aug 12, 2026 47

Company Overview A-Sonic Aerospace Ltd is a logistics company that has been expanding its multi-modal freight forwarding operations. Following its latest acquisition, the enlarged group now operates across 16 countries and 34 cities, positioning itself as a significant player in the regional logistics sector. Major Acquisition Details A-Sonic Aerospace has announced the acquisition of a 60% stake in JGL Group for a total cash consideration of S$15.216 million. The transaction structure includes S$6 million for 23.56% of new shares in JGL and S$9.216 million for 36.34% vendor shares. JGL Group brings over 30 years of operating history and specialises in multi-modal freight forwarding across ocean, air and land transportation, alongside paper trading activities and an upcoming ISO-tank cleaning and maintenance facility. JGL's business model demonstrates strong diversification, with ocean freight forwarding accounting for 77% of revenue, followed by paper trading at 12%. The company maintains a substantial presence across six ASEAN countries, with Singapore representing 48% of revenue, Vietnam 17%, Indonesia 11%, Cambodia 9%, Thailand 9%, and Malaysia 6%. For FY25, JGL recorded revenue of US$63.7 million and PATMI of US$1.82 million. Financial Impact and Growth Drivers The acquisition represents compelling value, with the logistics and paper trading business acquired at an implied valuation of S$48.4 million, translating to a 7.73x P/E ratio excluding the Isotank operations. The transaction is expected to deliver significant financial benefits, increasing A-Sonic's FY25 revenue and PATMI by 28% and 36% respectively on a pro forma basis. Earnings per share will rise substantially by 36% to S$0.0511. Multiple growth drivers emerge from this strategic combination. The increased operating scale and container volume creates opportunities for significant cost synergies, particularly in sea freight expenses. The expansion of the agent network enables reduced agent commissions through improved coverage of receiving agents. Additionally, enhanced working capital availability for JGL operations should drive increased customer revenue. The ISO tank depot, scheduled for operational commencement in FY27, will contribute maiden earnings to the group. The acquisition is expected to complete on 1 October 2026, subject to an Extraordinary General Meeting approval. Notably, A-Sonic continues trading below its net tangible assets value of S$0.6245, suggesting potential undervaluation despite the enhanced growth prospects from this strategic expansion. 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.

Lendlease REIT Sustains Retail Momentum with AEI Potential, Upgraded to S$0.77 Target

Published on Aug 12, 2026 31

Phillip Securities Research has maintained its BUY recommendation on Lendlease Global Commercial REIT (LREIT) whilst raising the target price to S$0.77 from S$0.73, following strong retail performance and improved capital management metrics. Company Overview Lendlease Global Commercial REIT operates a portfolio of retail and office properties, with its Singapore retail assets serving as key performance drivers. The REIT has recently expanded its retail footprint through the acquisition of PLQ Mall, positioning itself to benefit from suburban retail demand resilience. Strong Operational Performance Drives Growth The REIT delivered solid 2H26 results, with distribution per unit meeting 50% of expectations and rising 2.7% year-on-year. Gross rental income and net property income increased 6.8% and 6.6% respectively to S$110.0 million and S$78.7 million. This growth was underpinned by full-period contribution from PLQ Mall following its acquisition and exceptional retail performance metrics. Retail rental reversions strengthened to 11.7% from the previous year's 10.2%, whilst committed occupancy remained robust at 98.5%. Tenant sales surged 24.0% year-on-year, with cumulative visitation up 16.4%, demonstrating the strength of suburban retail demand. F&B, sports, and jewellery/watches tenants delivered particularly strong performance, though gifts and ancillary-use segments lagged. Management is executing strategic asset enhancement initiatives at PLQ Mall, reconfiguring approximately 16,000 square feet across Levels 1 and 2. The former H&M, Uniqlo, and Foot Locker spaces are being transformed into 3-5 new tenancies, including two anchor F&B concepts in advanced discussions. This initiative targets high-teens rental reversion upon completion by December 2026. Enhanced Capital Structure The REIT significantly improved its financial position, reducing gearing from 42.6% to 38.9% through strategic capital management. The PLQ acquisition was partially equity-funded via S$280 million private placement and S$196.6 million preferential offering, whilst proceeds from the S$462 million JEM Office sale supported debt repayment. Perpetual securities refinancing proved successful, with S$120 million of S$200 million maturing perpetuals refinanced at 4.28% versus the previous 4.2% rate. The remaining S$80 million was funded through cheaper bank debt. Cost of debt improved to 2.75%, down 71 basis points year-on-year and below management's 2.9% guidance. 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.

SpaceX Faces Financial Headwinds Despite Connectivity Boom, SELL Recommendation at US$75 Target

Published on Aug 11, 2026 56

Phillip Securities Research has initiated coverage of Space Exploration Technologies Corp. (SpaceX) with a SELL recommendation and a DCF-derived target price of US$75.00, based on a WACC of 10.0% and terminal growth rate of 3.5%. The research highlights significant concerns about the company's financial trajectory despite its market-leading positions in space launch and satellite connectivity. Company Overview and Business Performance SpaceX operates as a diversified space technology company with two primary revenue streams: its dominant launch franchise and rapidly expanding satellite broadband business through Starlink. The company's connectivity division has emerged as the clear profit engine, generating substantial growth with revenue climbing 50% to US$11.4 billion and achieving an impressive 39% segment operating margin. However, launch services now represent only 22% of FY25 revenue, indicating the company's strategic shift towards connectivity services. Financial Challenges and Cash Flow Concerns Despite strong growth in connectivity, SpaceX faces substantial financial headwinds. The company recorded an operating loss of US$2.6 billion and net loss of US$4.9 billion in FY25, accompanied by negative free cash flow of US$14 billion. Phillip Securities forecasts that SpaceX will continue generating negative free cash flows through at least FY30, with cumulative outflows expected to reach approximately US$90 billion over this period. AI Ambitions Face Uncertainty The company's artificial intelligence initiatives, whilst positioned as a growth story, present mixed prospects. AI revenue reached only US$3.2 billion in FY25 against a segment operating loss of US$6.4 billion. Critically, the AI business relies heavily on compute contracts that are set to expire by the end of 2029, creating uncertainty about future revenue sustainability. Phillip Securities projects group revenue will peak at US$58 billion in FY28 before declining. Investment Outlook The research presents a cautious view of SpaceX's investment prospects, with the SELL recommendation reflecting concerns about the company's path to profitability despite its technological achievements and market positions. The significant capital requirements and extended timeline to positive cash flow generation appear to weigh heavily on the investment thesis, even as the connectivity business demonstrates strong operational performance. 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.

SIA Demonstrates Resilience Despite Fuel Cost Surge, Phillip Securities Raises Target to S$7.35

Published on Aug 11, 2026 29

Company Overview Singapore Airlines (SIA) operates as a leading international carrier, providing passenger and cargo services globally. The airline has positioned itself as a premium operator in the competitive aviation sector, leveraging its strategic location and service quality to capture market share. Strong Revenue Growth Amid Operational Challenges Phillip Securities Research maintains a NEUTRAL recommendation on Singapore Airlines whilst raising the target price to S$7.35 from S$6.43, following the company's mixed first quarter performance for fiscal year 2027. SIA delivered impressive revenue growth of 19.3% year-on-year to S$5,714 million, representing 27% of full-year estimates and exceeding expectations. However, the airline reported a net loss of S$76 million compared to a profit of S$186 million in the previous year, primarily due to substantial fuel cost increases and associate losses. Record Revenue Performance Drives Positives The airline achieved record revenue performance across both passenger and cargo segments. Passenger revenue surged 18.6% to S$4,582 million, supported by carrying 10.9 million passengers, a 6.3% increase year-on-year, whilst passenger yields rose 12.0% to 11.2 cents per passenger kilometre. The cargo division demonstrated even stronger growth, with revenue jumping 33.5% to S$708 million. Cargo load factor improved 1.9 percentage points to 58.8%, driven by semiconductor and data-centre-related demand, whilst cargo yields increased substantially by 28.1%. Management highlighted that SIA successfully captured spillover passenger and cargo traffic as Middle Eastern carriers reduced capacity due to regional conflicts. However, this competitive advantage is expected to diminish in the second quarter as competing capacity is progressively restored, likely moderating future yield gains. SIA's balance sheet remains robust with a modest net debt position of S$264 million. Total debt increased marginally from S$10,644.7 million to S$10,743.9 million, including a new S$285 million offshore bond issuance largely offset by other debt repayments. The group maintains access to S$3.24 billion of undrawn committed credit lines, providing substantial financial flexibility. Fuel Cost Pressures Present Primary Challenge The primary headwind facing SIA is the dramatic surge in fuel costs. Net fuel costs jumped 78.5% to S$2,253 million as gross fuel costs more than doubled due to elevated jet fuel prices following Middle East conflicts. Management indicated fuel expenses have risen from approximately 28% to 40% of group expenditure this quarter. This increase was partially mitigated by a S$436 million favourable hedging gain, with 46% of first quarter fuel needs hedged through the company's programmatic hedging strategy. 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.

Sheng Siong Maintains Strong Performance but Valuation Concerns Prompt Neutral Rating with S$3.31 Target

Published on Aug 11, 2026 21

Company Overview Sheng Siong Group Ltd operates as a leading supermarket chain, focusing on fresh products and frozen meals whilst expanding its store footprint across its markets. The company has demonstrated consistent operational improvements, particularly in gross margin expansion over more than a decade. Financial Performance Analysis Sheng Siong delivered solid first-half results for FY26, with revenue and profit after tax and minority interests (PATMI) reaching 50% and 48% respectively of full-year forecasts. The company's second quarter performance was particularly impressive, with PATMI rising 11% year-on-year to S$38 million. This growth was underpinned by record gross margins of 32.8% and strategic store expansion. The company's margin expansion story continues to impress investors, with FY26 expected to mark the 14th consecutive year of rising gross margins. This sustained improvement reflects the company's strategic shift towards higher-margin fresh products, supported by robust demand in frozen product categories. The competitive landscape appears to have stabilised, with more rational pricing strategies across the sector. Key Operational Strengths Phillip Securities Research identified several positive factors driving Sheng Siong's performance. The jump in gross margins represents a standout achievement, with quarterly gross margins reaching a record 32.8% in the second quarter. This improvement stems from increased contributions from fresh products, which require specialised equipment to extend shelf life, alongside growth in frozen meals and meat segments. Store expansion continues to drive revenue growth, with the company increasing its store footprint by 9.5% year-on-year to 772,600 square feet across four additional stores, despite closing one location at Elias Mall in April. Notably, revenue per square foot remained relatively stable at S$1,100, demonstrating consistent productivity across the expanded network. Remarkably, Phillip Securities Research noted no significant negative factors in their analysis, highlighting the company's strong operational execution. Investment Outlook and Recommendation Despite strong operational performance, Phillip Securities Research downgraded their recommendation from Accumulate to Neutral, citing valuation concerns. The target price was raised to S$3.31 from S$3.16, incorporating peak pandemic valuations and rolling forward to 28x price-earnings multiples for FY27. Several headwinds are anticipated, including slower 5% net store growth due to closures, rising operating costs from utility renegotiations, and reduced free cash flow as the company begins capital expenditure on its S$520 million Sungei Kadut distribution centre project spanning 2026-2030. 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.

CapitaLand Ascott Trust Maintains Growth Trajectory Despite Near-Term Headwinds, BUY Rating with S$1.08 Target Price

Published on Aug 11, 2026 13

Steady Performance Amidst Portfolio Transformation CapitaLand Ascott Trust, a leading hospitality real estate investment trust, delivered a resilient performance in the first half of FY26 despite facing operational challenges from its ongoing portfolio enhancement initiatives. The trust operates a diversified portfolio of serviced residences and hotels across key global markets, positioning itself as a premier hospitality accommodation provider. Financial Performance Shows Stability The trust reported a 1H26 distribution per unit (DPU) of 2.53 cents, remaining stable year-on-year and aligning with analyst estimates. This result represented 41% of the full-year forecast, with management expecting seasonally stronger performance in the second half. However, core DPU declined 10% year-on-year to 2.16 cents, primarily attributed to timing differences between acquisitions and divestments, income losses from properties undergoing asset enhancement initiatives (AEIs), foreign exchange fluctuations, and one-off tax adjustments. On a same-store basis, distributable income decreased 1% year-on-year. Operational Metrics Reflect Mixed Trends Revenue per available unit (RevPAU) for the second quarter declined 2% year-on-year to S$156, largely due to downtime from properties undergoing enhancement works in key markets. However, on a same-store basis, RevPAU demonstrated resilience with a 1% year-on-year increase, supported by improved operational efficiency and a notable 1 percentage point improvement in portfolio occupancy to 79%. Future Growth Catalysts Phillip Securities Research maintains a BUY recommendation with an unchanged dividend discount model-based target price of S$1.08. The research house maintains its FY26 DPU forecast of 6.1 cents, incorporating S$26 million in distribution top-ups to offset income losses from The Cavendish London AEI project. The firm expects low single-digit portfolio RevPAU growth driven by resilient room rates and higher occupancy levels. Completed enhancement initiatives are expected to support long-term portfolio growth, with higher contributions anticipated from stabilised acquisitions. Notably, The Cavendish London post-AEI and Somerset Clarke Quay are projected to contribute a combined 0.16 cents to FY27 DPU, increasing to 0.21 cents in FY28 and 0.50 cents in FY29. At current levels, the shares offer an attractive FY26 dividend yield of 6.7%. 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.

Apple Inc. Faces Near-Term Headwinds Despite Strong Demand, Downgraded to REDUCE with US$290 Target Price

Published on Aug 11, 2026 8

Apple Inc. operates as a technology company that designs, develops, and sells consumer electronics, computer software, and online services. The company's flagship products include the iPhone smartphone and MacBook computer lines, which continue to represent significant revenue drivers for the business. Strong Performance Amid Supply Challenges Apple delivered solid third-quarter results for fiscal year 2026, with both revenue and profit after tax and minority interests (PATMI) meeting analyst expectations. The company achieved impressive 17% year-on-year revenue growth, driven by robust performance across key product categories. iPhone sales surged 22% compared with the previous year, whilst MacBook revenue expanded by an even stronger 29% year-on-year. For the nine-month period, Apple's revenue and PATMI reached 77% and 80% respectively of full-year forecasts, indicating the company remains on track to meet annual projections. The strong performance reflects continued consumer appetite for Apple's premium products across multiple segments. Demand Outpacing Supply Capacity Despite the positive financial results, Apple faces significant operational challenges that are constraining its growth potential. Management highlighted that demand for both iPhone 17 and MacBook products continues to exceed the company's ability to supply them, creating a bottleneck that limits revenue opportunities. Looking ahead to the fourth quarter of fiscal 2026, Apple provided revenue growth guidance of 9 to 11% year-on-year. However, this projection reflects the impact of ongoing supply constraints that prevent the company from fully capitalising on strong consumer demand. Additionally, foreign exchange headwinds are expected to create further pressure on revenue growth during the period. Rising Cost Pressures Memory prices represent a growing concern for Apple's profitability outlook. The continued increase in memory costs poses a meaningful headwind that could compress margins going forward. This cost inflation occurs at a challenging time when the company is already grappling with supply chain limitations. Research Recommendation Phillip Securities Research has downgraded Apple from NEUTRAL to REDUCE, maintaining a DCF target price of US$290. The research firm kept its fiscal year 2026 revenue and PATMI assumptions unchanged, applying a weighted average cost of capital of 6.3% and terminal growth rate of 3.5%. The downgrade reflects concerns about supply constraints, rising memory costs, and AI regulations weighing on near-term performance. Notably, there remains no clear evidence that Apple Intelligence is meaningfully driving product upgrades among consumers. 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.

Latest Videos

【辉立周末报】中东战火烧不停、AI泡沫恐破？黄金原油将成下一个风口？｜黄玮杰、章晶、顾明喆

Follow us

INVESTMENT

LEVERAGE

PROTECTION

THEMATIC

OTHER SERVICES

ACCREDITED INVESTOR

EDUCATION

RESEARCH

TOOLS

New to POEMS?

FUNDING

ACCOUNT MECHANICS

SEGMENTS

Account Opening

QUICK GUIDE