Specialty Fund

Tuan Sing Limited: Credit Outlook Anchored by Asset Quality Amid Elevated Leverage

Company Overview Tuan Sing is a Singapore-listed real estate and hospitality group with activities spanning real estate investment, hospitality operations, and property development, with key exposure to Singapore, Australia, and Indonesia. The group is majority owned by Nuri Holdings (S) Pte Ltd (54.5%), a family office for the Liem family, with Michelle Liem and William Liem as key decision-makers. 1H25 Credit Performance Highlights Tuan Sing has meaningful assets backing, but leverage keeps balance-sheet buffers thin. Total assets were S$2.71bn with equity of about S$1.20bn as at 1H25, providing a base level of loss absorption and some refinancing flexibility. However, leverage remains elevated, with net debt to equity at 1.01x and total debt to total assets at 0.50x, while total debt of S$1.35bn compares with cash of S$143mn. This limits tolerance for valuation swings or earnings shocks and keeps credit comfort sensitive to liquidity headroom. The near-term earnings drag is transition-driven, with improvement expected as assets stabilise and AEI benefits season through. 1H25 showed a clearer YoY improvement versus 1H24, supported by the completion of Dunearn Village, while Langley Park is expected to contribute higher recurring cash flows as leasing and operations normalise. Management is guiding for EBIT and cash flow to improve from 2026, implying a more resilient recurring earnings base that should gradually reduce reliance on episodic development outcomes. However, execution risk remains front and centre, given the long-dated uplift from Melbourne Collins Street, even as liability management is improving. The group has secured the planning permit for the redevelopment of Collins Street in Melbourne, comprising Grand Hyatt Melbourne and retail, with completion targeted in 2028. Management also guiding for rental escalation above current in-place rents supported by premium and luxury tenanting and destination F&B, which is supportive for end-state valuation, but the credit impact is back-ended and depends on disciplined capex phasing and disruption control through the build period. On the funding side, management indicated ongoing refinancing into a 3-4 year maturity bucket, which should reduce near-term maturity concentration and improve visibility during execution. Separately, the broader pipeline offers upside optionality, with Opus Bay in Batam supported by improving connectivity, including the Batam airport development, and Tuan Sing’s ownership of the Teluk Senimba Ferry Terminal strengthens ecosystem demand; with land cost effectively zero, development can be phased alongside take-up, supporting a more controllable cash investment profile. Moving forward, the first watchpoint is whether coverage meaningfully rebuilds into 2026, through a sustained uplift in recurring EBIT or EBITDA that creates a durable interest buffer and reduces reliance on refinancing or asset sales. The second is Melbourne execution into 2028, specifically capex phasing, cost containment, disruption management, and leasing traction consistent with the rental escalation and premium-brand tenanting assumptions; any slippage would extend the period of tight liquidity and covenant sensitivity. Credit view: We are cautiously positive on Tuan Sing’s outlook. Management’s guidance for earnings and cash flow to improve from 2026, alongside normalising transitions and AEI benefits, is credit supportive, and refinancing actions should reduce near-term maturity pressure. However, with leverage already elevated and the Melbourne uplift back-ended, credit comfort remains most sensitive to liquidity discipline and covenant buffers over the execution period, making delivery and funding management the key determinants of spread performance. Overview of Tuan Sing’s Outstanding SGD Bonds   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.

Stocks

AIMS APAC REIT: Defensive Industrial Cash Flows and Moderate Leverage Support a Constructive Credit View

Company Overview AIMS APAC REIT (AAREIT) owns a diversified portfolio of industrial properties across Singapore (~71% of portfolio value) and Australia (~29% of portfolio value). The portfolio is primarily logistics and warehouse assets, complemented by light industrial facilities and business parks, with an essential-use tilt linked to supply chains, data infrastructure, and consumer staples. AAREIT is sponsored by AIMS Financial Group, which holds about 18.66% and is a long-established industrial real estate and fund management platform founded and controlled by George Wang. 1H FY2026 Credit Performance Highlights AAREIT’s credit strength is anchored by stable, defensive industrial cash flows with good lease visibility. Around 82.5% of GRI is derived from essential and defensive industries, supporting steadier demand through the cycle. Portfolio occupancy is 93.3%, with a WALE of 4.2 years, providing earnings visibility. Cash-flow stability is further supported by contractual rental escalations of about ~2% per annum in Singapore and ~3% per annum in Australia, alongside master-lease exposure of about 42% of assets, which limits leasing volatility. Operating momentum remains constructive, reinforcing income resilience. In 1H FY2026, the REIT delivered 1.1% YoY growth in NPI and DPU, supported by 7.7% positive rental reversions on renewed Singapore leases and disciplined cost control. This indicates operating cash flows are holding up and remain sufficient to meet interest servicing needs under a base-case scenario. Balance-sheet risk is moderate with clear near-term refinancing comfort, although coverage remains the main monitoring point. Aggregate leverage is about 35%, comfortably below MAS limits, and there are no debt maturities until FY2027, which reduces near-term refinancing pressure. Liquidity is supported by around S$170mn of cash and undrawn committed facilities, preserving flexibility for capex, market volatility, or selective acquisitions without forcing leverage higher. Interest-rate risk is partially mitigated with ~70% of debt fixed-rate and a blended cost of debt that has declined to 4.2. Reported ICR remains adequate at around 4.5x when excluding perpetual distributions, although headroom would tighten if interest rates remain elevated for an extended period or if operating income softens. Asset rejuvenation and targeted acquisitions are supportive in the longer term, with ongoing AEIs and sustainability upgrades improving competitiveness, and the proposed Framework Building acquisition, at an indicated 8.1% NPI yield, is expected to be DPU accretive and broadly neutral. Looking forward, the main sensitivities are the direction of interest coverage if rates remain elevated for longer, and tenant concentration risk under master leases, given the relatively meaningful master-lease exposure. Refinancing execution from FY2027 onward will also be a key focus once the maturity wall comes into view, particularly if funding conditions turn less accommodating. Credit view: We maintain a constructive view on AAREIT as an industrial REIT credit. Defensive tenant exposure, contractual escalations, and solid lease visibility support recurring cash flows, while moderate leverage and the absence of near-term maturities provide refinancing comfort. Coverage headroom is not wide, so sustained discipline on costs, leasing, and capital allocation will be important. Overall, downside protection remains adequate under a base-case scenario. Overview of AIMS APAC REIT’s Outstanding SGD Bonds   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.

Stocks

UOB: Front-Loaded Provisions Reinforce a Defensive Credit Profile and Strengthen Loss Buffers

Company Overview United Overseas Bank (UOB) is a Singapore bank with a diversified franchise across ASEAN, supported by a conservative balance-sheet posture and strong regulatory standing. 3Q25 Credit Performance Highlights The headline declines in net profit during the quarter, down 67% QoQ, was largely attributable to S$615mn of discretionary general allowances. These provisions were taken ahead of any material stress in the loan book, reflecting management’s conservative and forward-looking risk posture. Core operating performance remained resilient, with operating profit declining by only 3% QoQ, supported by fee-based and transaction-related income streams that are less sensitive to interest-rate movements. By front-loading loss recognition, UOB has effectively reduced the risk of sharper provisioning shocks later in the cycle while enhancing balance-sheet durability. Asset quality remains stable, but the more notable development is the strengthening of coverage and buffers. The NPL ratio remained at 1.6%, with no clear signs of broad-based deterioration, while NPA coverage rose to 100% and 240%, including collateral, following the higher allowances. General provision coverage also increased to 1.0% of performing loans from 0.8%, providing a thicker cushion against macro volatility and sector-specific risks, particularly across overseas portfolios where stress can emerge earlier. Capital and liquidity continue to anchor the credit. CET1 eased modestly to 14.6% after interim dividends but remains comfortably above regulatory requirements and within management’s operating range, reinforcing strong capital headroom. Liquidity remains exceptionally strong with LCR at 143%, NSFR at 116%, and a conservative loan-to-deposit ratio around 82%, while deposit growth continues to outpace loan growth, supporting stable funding and low refinancing risk. With management guiding credit costs to normalise to 25-30 bps after the pre-emptive provisioning, the elevated buffer reduces the probability of abrupt future earnings or capital shocks, lowering credit risk volatility through the cycle. Credit view: UOB’s credit profile remains firmly defensive, underpinned by a strong capital base, ample liquidity buffers and disciplined balance-sheet management. While reported profitability weakened sharply in 3Q25, this was driven by sizeable pre-emptive provisioning rather than any deterioration in underlying asset quality. Importantly, the quarter represents a deliberate strengthening of loss-absorption capacity, not a negative inflection in UOB’s credit fundamentals. Overview of UOB’s Outstanding SGD Bonds   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.

Thomson Medical Group Ltd: Mixed Performance Amid Strategic Transformation

Company Overview Thomson Medical Group Ltd is a healthcare provider operating across Singapore, Malaysia, and Vietnam, focusing on medical services including inpatient and outpatient care, with expanding specialties in oncology, orthopaedics, spinal care, and emergency services. Financial Performance Below Expectations Thomson Medical Group's first-half results for FY26 presented a mixed picture, with revenue meeting expectations at 49% of full-year forecasts but profitability falling short. The company reported a narrowed net loss of S$10.2 million, representing a 21% improvement due to reduced interest expenses. However, EBITDA performance disappointed at only 38% of annual projections, prompting analysts to lower full-year EBITDA estimates by 17% to S$84 million. The Positive: Malaysia's Remarkable Turnaround The standout performance came from Malaysia operations, which delivered a dramatic transformation. Revenue surged 29% year-on-year to S$64 million, driven by substantial increases in average bill sizes for both inpatients (+18%) and outpatients (+57%). EBITDA experienced an impressive 73% year-on-year spike to S$11.5 million, whilst profit after tax and minority interest jumped five-fold to RM10.9 million. This turnaround was attributed to operating leverage benefits, with staff costs remaining stable despite revenue growth. The arrival of Oncocare services and increased medical tourism were key drivers of this exceptional performance. The Negative: Singapore Faces Cost Pressures In contrast, Singapore operations struggled with cost management challenges. Revenue remained flat during the first half, with bed occupancy rates at 50%. EBITDA margins contracted due to elevated operating and staff costs, despite a 22.6% year-on-year increase in average inpatient bill sizes. The introduction of more complex specialty cases, including orthopaedics, oncology, spinal, and emergency care services, contributed to higher revenue per patient but was offset by increased operational expenses. Revised Outlook and Recommendation Phillip Securities Research has downgraded its recommendation from BUY to ACCUMULATE, reflecting the mixed operational performance. The target price has been reduced to S$0.071 from the previous S$0.074, incorporating lower earnings projections. A net loss of S$18.9 million is expected for FY26, with raised depreciation estimates contributing to the revised outlook. The development of the Johor land bank remains pending, subject to review of multiple proposals. Whilst the turnaround strategy shows promise with increasing case complexity and revenue intensity, additional upfront costs and investments have impacted near-term profitability. Frequently Asked Questions Q: What were the key highlights of Thomson Medical Group's first-half results? A: Revenue met expectations at 49% of full-year forecasts, but EBITDA disappointed at 38% of projections. Net loss narrowed by 21% to S$10.2 million due to lower interest expenses. Q: How did Malaysia operations perform compared to Singapore? A: Malaysia delivered exceptional results with 29% revenue growth and 73% EBITDA increase, whilst Singapore revenue remained flat with declining EBITDA margins due to higher costs. Q: What drove the improvement in Malaysia's performance? A: The turnaround was driven by Oncocare's arrival, increased medical tourism, and significant jumps in average bill sizes for inpatients (+18%) and outpatients (+57%). Q: Why did Singapore operations struggle despite higher bill sizes? A: Although average inpatient bill sizes increased 22.6% due to more specialty cases, this was offset by higher operating and staff costs, resulting in margin compression. Q: What is Phillip Securities Research's current recommendation? A: The recommendation has been downgraded from BUY to ACCUMULATE, with a reduced target price of S$0.071 (previously S$0.074). Q: What are the key factors affecting the company's outlook? A: The outlook is influenced by ongoing turnaround efforts in Singapore and Malaysia, pending Johor land bank development, and the impact of upfront investments on near-term profitability. Q: How has the company's financial guidance changed? A: FY26 EBITDA estimates were lowered by 17% to S$84 million, with an expected net loss of S$18.9 million due to higher depreciation estimates. 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.

Stocks

Airbnb Inc Upgraded to Accumulate as New US Initiatives Drive Booking Growth

Company Overview Airbnb Inc operates as a global online marketplace for short-term accommodation rentals, connecting hosts with guests seeking alternative lodging options across diverse markets worldwide. Financial Performance and Outlook Airbnb delivered mixed results for FY25, with revenue meeting expectations at 102% of forecast whilst profit after tax and minority interests (PATMI) fell slightly short at 96%. Fourth quarter revenue expanded 12% year-on-year to US$2.8 billion, primarily driven by a robust 10% increase in booking volumes. However, PATMI declined 26% year-on-year due to increased investment in new growth and policy initiatives. Looking ahead, management expects first quarter FY26 revenue to grow 14-16% year-on-year to US$2.59-2.63 billion, supported by modest average daily rate growth, high single-digit booking volume gains, and favourable foreign exchange tailwinds. The company anticipates higher booking volumes in FY26 driven by major sporting events, including the Winter Olympics this quarter and the 2026 FIFA World Cup across 16 North American cities from June to July. Key Positives Driving Growth The company demonstrated strong momentum in booking activity, with nights and seats booked reaching 121.9 million, representing a 10% year-on-year increase. This growth was particularly robust in the US market, supported by stronger adoption of new customer-friendly initiatives including Reserve Now, Pay Later (eliminating upfront payments), simplified fee structures for enhanced price transparency, and updated cancellation policies. These initiatives are set to expand to global guests and cross-border states within the US in coming months. Average daily rates strengthened considerably, expanding 6% year-on-year to US$167.5 in the fourth quarter, a three-point improvement. This increase was attributed to longer booking lead times, faster growth in higher-priced short-term stays compared to extended 28-plus day stays, and increased bookings for larger homes with four or more bedrooms. Global expansion continues to show promise, with nights booked in new markets increasing at twice the rate of core markets. Latin America and Asia Pacific regions experienced mid-to-high teen growth in nights booked, with average daily rates boosted by price appreciation and currency effects. Brazil, Japan, and India emerged as the fastest-growing countries, recording nights booked growth of 50% year-on-year. Research Recommendation Phillip Securities Research has upgraded Airbnb to Accumulate from Neutral, citing recent share price performance. The target price has been raised to US$138 from the previous US$127 using a discounted cash flow model rolled forward to FY26, whilst maintaining unchanged assumptions with a weighted average cost of capital of 7% and terminal growth rate of 3.5%. Frequently Asked Questions Q: What was Airbnb's revenue performance in the fourth quarter? A: Airbnb's fourth quarter revenue grew 12% year-on-year to US$2.8 billion, driven by a 10% increase in booking volumes to 121.9 million. Q: Why did PATMI decline despite revenue growth? A: PATMI declined 26% year-on-year due to higher investment in new growth and policy initiatives, despite the revenue increase. Q: What new initiatives is Airbnb implementing in the US? A: Airbnb is implementing Reserve Now, Pay Later (zero upfront payment), simplified fee structures for greater price transparency, and updated cancellation policies, with plans to expand these globally. Q: What is driving the increase in average daily rates? A: The 6% year-on-year increase in ADR to US$167.5 is driven by longer booking lead times, faster growth in higher-priced short-term stays versus extended stays, and more bookings for larger homes with four or more bedrooms. Q: Which regions and countries are showing the strongest growth? A: Latin America and Asia Pacific regions are experiencing mid-to-high teen growth, with Brazil, Japan, and India being the fastest-growing countries with nights booked up 50% year-on-year. Q: What is Phillip Securities' new recommendation and target price? A: Phillip Securities upgraded Airbnb to Accumulate from Neutral with a raised target price of US$138, up from the previous US$127. Q: What major events may drive FY26 booking volumes? A: Higher booking volumes in FY26 may be driven by the Winter Olympics this quarter and the 2026 FIFA World Cup across 16 North American cities from June to July. Q: What is the expected revenue guidance for first quarter FY26? A: Management expects first quarter FY26 revenue to grow 14-16% year-on-year to US$2.59-2.63 billion, supported by modest ADR growth, high single-digit booking volume gains, and FX tailwinds. 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.

Stocks

AppLovin Corp Maintains Strong Growth Trajectory Despite Market Challenges

Company Overview AppLovin Corp operates as a leading mobile technology platform, primarily focused on mobile gaming advertising and monetisation solutions. The company's core business revolves around its AXON advertising platform, which serves both mobile gaming developers and increasingly, e-commerce advertisers, through advanced machine learning algorithms and targeted advertising capabilities. Strong Financial Performance Drives Upgrade Phillip Securities Research has upgraded AppLovin Corp to BUY from ACCUMULATE, setting a target price of US$600. This upgrade comes despite lowering the previous target price, reflecting both the company's strong operational performance and a more cautious market environment. The research house increased its weighted average cost of capital to 6.5% from 6.0% to account for current market volatility. The fourth quarter of 2025 demonstrated AppLovin's resilience, with revenue climbing 66% year-on-year to US$1.66 billion, though this fell slightly below expectations. More impressively, profit after tax and minority interests surged 84% year-on-year to US$1.1 billion, surpassing forecasts and highlighting the company's improving operational efficiency. Robust Gaming Advertising Foundation The company's advertising business continues to demonstrate exceptional strength, driven by technological improvements in its core mobile gaming segment and the expansion into e-commerce verticals. AXON's, their self-service AI-powered advertising platform, unique approach of delivering full-screen video advertisements during natural game breaks sets it apart from competitors. This format ensures complete viewability and captures users' full attention, resulting in an average watch time exceeding 35 seconds—significantly longer than the 30 seconds typical for television and 7 seconds for social media platforms. The platform's superior monetisation efficiency enables advertisers to achieve break-even on acquisition costs within 30 days, considerably faster than the approximately three months required on other major advertising platforms. This efficiency has driven annual advertiser spending on the platform to exceed US$11 billion. Strong Profitability Growth AppLovin's profitability metrics showed remarkable improvement in the fourth quarter, with net income rising 84% year-on-year to US$1.1 billion. The company achieved a 16% margin improvement, with margins expanding from 61% to 77%, supported by enhanced operating leverage and a 55% year-on-year reduction in expenses. Free cash flow increased 88% year-on-year to US$1.31 billion, whilst the company maintains a healthy cash balance of US$3.95 billion, representing 91% year-on-year growth. The company retains approximately US$3.28 billion in remaining share repurchase authorisation. Frequently Asked Questions Q: What is Phillip Securities Research's current recommendation and target price for AppLovin Corp? A: Phillip Securities Research has upgraded AppLovin Corp to BUY from ACCUMULATE with a target price of US$600. Q: How did AppLovin's fourth quarter 2025 financial performance compare to expectations? A: Revenue of US$1.66 billion was below expectations but grew 66% year-on-year, whilst profit after tax and minority interests of US$1.1 billion surpassed forecasts, rising 84% year-on-year. Q: What makes AppLovin's advertising platform unique compared to competitors? A: AXON delivers full-screen video advertisements during natural game breaks, ensuring complete viewability with average watch times exceeding 35 seconds, compared to 30 seconds for TV and 7 seconds for social media platforms. Q: How quickly can advertisers achieve break-even on AppLovin's platform? A: The platform's monetisation efficiency enables advertisers to break even on acquisition costs within 30 days, significantly faster than the roughly three months required on other major advertising platforms. Q: What drove the strong profitability growth in the fourth quarter? A: Net income growth of 84% year-on-year was driven by robust revenue growth, improved operating leverage, a 55% reduction in expenses, and margin expansion from 61% to 77%. Q: What is the company's current financial position? A: AppLovin maintains a healthy cash balance of US$3.95 billion, up 91% year-on-year, with free cash flow of US$1.31 billion and remaining share repurchase authorisation of approximately US$3.28 billion. Q: Why did Phillip Securities Research lower its revenue forecast despite the upgrade? A: The research house lowered revenue forecasts by 15% as e-commerce revenue is expected to take time to materialise, given the segment remains in early stages and is focusing on scaling. Q: What factors are expected to support future growth? A: Growth is expected to be supported by expansion into the e-commerce vertical, AXON, and continued strong performance in the gaming segment. 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. 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BRC Asia Ltd Delivers Strong Growth with Record Order Book Surge

Company Overview BRC Asia Ltd is a Singapore-based construction company that specialises in providing building and infrastructure solutions. The company operates in the construction sector, serving various segments including residential housing, airport infrastructure, and healthcare projects. Strong Financial Performance Drives Growth BRC Asia reported impressive first-quarter 2026 results, with revenue surging 27% year-on-year to S$444 million, marking the highest revenue growth since the third quarter of 2022. This substantial increase was primarily driven by an estimated 42% year-on-year rise in delivery volumes, reflecting stronger project offtake across the company's portfolio. The company's profit after tax and minority interests (PATMI) jumped 30% year-on-year to S$27.3 million, demonstrating robust operational performance. Net margins expanded to 6.1%, up from 5.6% in the previous year, whilst gross margins reached 10.5%, representing a significant improvement of 2% year-on-year. Record Order Book Provides Future Growth Visibility The standout achievement for BRC Asia was its order book performance, which spiked 47% year-on-year to reach a record S$2.2 billion in the first quarter of 2026. This substantial increase was underpinned by successful contract wins across multiple sectors, including HDB Build-To-Order (BTO) contracts, the prestigious Changi Airport Terminal 5 project, and various healthcare initiatives. The company's S$570 million Changi Airport Terminal 5 contract represents a significant component of the order book and is expected to progress substantially over the coming period. Most of the current order book is anticipated to be completed within the next two years, providing strong revenue visibility. Favourable Market Outlook The construction landscape in Singapore appears increasingly supportive, with the Building and Construction Authority projecting total construction demand of S$47-53 billion in 2026. This represents a substantial 61% increase above the 20-year historical average, indicating a robust pipeline of opportunities. Research Recommendation and Outlook Phillip Securities Research maintains a BUY recommendation on BRC Asia, raising the target price to S$5.30 from the previous S$5.10. The analysts increased their FY26 revenue and PATMI forecasts by 16% each, reflecting confidence in stronger project offtake driven by the record order book. The stock offers an attractive FY26 dividend yield of 5.3%, making it appealing for income-focused investors. Frequently Asked Questions Q: What was BRC Asia's revenue growth in 1Q26? A: BRC Asia's revenue surged 27% year-on-year to S$444 million in 1Q26, representing the highest revenue growth since 3Q22. Q: What drove the strong revenue performance? A: Revenue growth was driven by an estimated 42% year-on-year increase in delivery volumes due to stronger project offtake across the company's portfolio. Q: What is Phillip Securities Research's recommendation and target price? A: Phillip Securities Research maintains a BUY recommendation with a raised target price of S$5.30, up from the previous S$5.10. Q: How did profitability perform in 1Q26? A: PATMI jumped 30% year-on-year to S$27.3 million, with net margins improving to 6.1% from 5.6% in the previous year. Q: What is the outlook for Singapore's construction market? A: The Building and Construction Authority projects total construction demand in Singapore to be S$47-53 billion in 2026, which is 61% higher than the 20-year historical average. Q: What is the expected dividend yield? A: BRC Asia trades at an attractive FY26 dividend yield of 5.3%, making it appealing for income-focused investors. Q: What are the key projects in BRC Asia's order book? A: Major projects include HDB BTO contracts, the S$570 million Changi Airport Terminal 5 contract, and various healthcare projects, with most expected to be completed within two years. 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. 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CapitaLand Investment Faces China Valuation Challenges Despite Resilient Fee Growth

Company Overview CapitaLand Investment Limited (CLI) is a leading real estate investment manager operating across multiple asset classes and geographical markets. The company focuses on an asset-light strategy, generating recurring fee income through fund management services across listed and private funds, alongside lodging and commercial management. Mixed Financial Performance Amid China Headwinds CLI reported FY25 PATMI of S$145 million, representing a steep 70% year-on-year decline that fell significantly short of expectations, forming only 22% of our FY25 forecast. This disappointing headline figure was primarily driven by substantial S$439 million revaluation losses, predominantly from Chinese assets. However, when excluding these revaluation impacts, operating PATMI of S$539 million performed more respectably at 98% of estimates, with a 6% year-on-year increase supported by higher contributions from listed funds, reduced finance costs, and lower operating expenses. The company's Funds Under Management expanded 7% year-on-year to S$125 billion. Management believes organic growth can drive FUM to approximately S$160 billion, though acquisitions will be necessary to achieve the ambitious S$200 billion target by 2028. Strong Positives in Fee Income Growth CLI demonstrated resilience in its core fee-generating businesses, with fee income delivering steady 6% year-on-year growth. All fee-related business segments recorded revenue increases, with listed funds management up 8% and private funds management surging 24%, including CLI's 40% share of SCCP revenue. The lodging management division achieved a record year, signing 19,000 units across 102 properties, which positions the company well for long-term growth as these units become operational. CLI now manages 176,000 keys, with over 100,000 currently operational. Significant Valuation Pressures The major negative factor was the sharp decline in asset valuations, with S$436 million in aggregate fair value losses recorded. China bore the brunt of these losses at S$545 million, particularly affecting office and business park assets, as challenging operating conditions persist with negative rental reversions across all sectors. The UK and Europe also contributed S$62 million in losses, though these were partially offset by gains in Southeast Asia (S$59 million) and India (S$98 million). Divestment activity slowed considerably, falling from S$5.5 billion in FY24 to S$3.1 billion in FY25, largely due to the higher proportion of remaining assets located in China. Approximately S$1 billion was divested from China at 10-20% discounts to book value, leaving roughly S$3 billion of Chinese assets still on the books. Investment Outlook Phillip Securities Research maintains a BUY recommendation with a higher sum-of-the-parts target price of S$3.69, up from the previous S$3.65. The firm expects balance sheet divestments to accelerate in FY26, with potential for a second C-REIT listing. The board has proposed a final dividend of 12 cents, implying a 3.8% yield. Frequently Asked Questions Q: What caused CapitaLand Investment's significant earnings decline in FY25? A: The 70% year-on-year PATMI decline was primarily due to S$439 million in revaluation losses, mainly from China assets. Excluding these losses, operating PATMI actually grew 6% year-on-year. Q: How did CLI's fee income business perform? A: Fee income showed resilience with 6% year-on-year growth. Listed funds management grew 8%, private funds management surged 24%, and lodging management signed a record 19,000 units across 102 properties. Q: What is CLI's Funds Under Management target? A: FUM currently stands at S$125 billion, up 7% year-on-year. CLI believes it can grow organically to approximately S$160 billion but acknowledges acquisitions will be necessary to reach the S$200 billion target by 2028. Q: Which geographical markets are causing valuation concerns? A: China recorded the largest losses at S$545 million, particularly in office and business parks. The UK and Europe also saw S$62 million in losses, though Southeast Asia and India posted gains of S$59 million and S$98 million respectively. Q: How much Chinese assets does CLI still hold? A: After divesting approximately S$1 billion from China at 10-20% discounts to book value, CLI still has roughly S$3 billion of Chinese assets remaining on its books. Q: What is Phillip Securities Research's recommendation? A: Phillip Securities Research maintains a BUY recommendation with a target price of S$3.69, citing CLI's robust recurring fee income and asset-light strategy that supports resilience amid macro uncertainty. Q: What dividend has been proposed for FY25? A: CLI’s board has proposed a final dividend of 12 cents, which implies a dividend yield of 3.8%. 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.

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