Proxy Voting
Proxy voting is one of the most basic aspects of corporate governance. It allows shareholders to be engaged and vote on the organisation’s key decisions without having to attend meetings, ensuring that shareholder interests are reflected in the company’s policies, operations, and long-term strategy. The article intends to provide an elaborate description of proxy voting, its types, challenges, and examples in simple, easy-to-understand language.
Table of Contents
What is Proxy Voting?
The voting of proxies is the assignment of voting rights from the shareholder to another individual or organisation, called a proxy, to represent him during meetings with shareholders. Due to distance and schedule differences between the two places, the owner of the shares cannot necessarily be present in meetings and needs proxy voting for a stronger presence of their interest.
A proxy may be a person, for example, a trusted advisor, or an organisation, such as a proxy advisory firm. Through this process, shareholders can influence the decisions of a corporation, for instance:
Election of board members
- Approval of mergers or acquisitions
- Changes in policies on corporate governance
- Decisions on executive compensation packages
The one granting the voting authority is called the “principal,” while the one assigned with the voting authority is referred to as the “proxy.”
Understanding Proxy Voting
Proxy voting is the conduit between shareholders and the company in its decision-making process. It operates in a sequence:
- Distribution of Proxy Materials
Before the meeting, shareholders obtain proxy materials from the company. These usually consist of a proxy statement explaining the agenda schedule, a proxy card through which voting is done, and instructions on how to vote.
- Proxy voting
Shareholders can attend the meeting personally and vote or complete their proxy card and indicate their views regarding the matters they submit. Ballots are frequently submitted by mail or telephone or even on the internet from the company’s business.
- Tally Votes
After the meeting, all proxy and in-person votes cast are tabulated. Sometimes, an independent auditor or even an internal team handles the process to ensure accuracy.
- Legal Compliance
Legal frameworks such as the Securities and Exchange Commission allow proxy voting in the United States. Thus, they guard against all shareholders receiving unequal treatment by making the transaction practice clear and fair.
Proxy voting allows shareholders to participate despite being absent in person, and therefore, their voices are included in governance.
Types of Proxy Voting
There are several types of proxy voting mechanisms to suit the different needs of the shareholders:
- General Proxy.
A general proxy gives the proxy holder, often a company representative or a designated proxy agent, full authority to vote on all matters presented at the shareholder meeting. These include resolutions, elections of directors, and other important decisions. The proxy holder exercises discretion in voting, acting in the shareholder’s best interest.
- Limited Proxy
A limited proxy will provide more explicit instructions to the proxy holder. Shareholders can specify how they want their shares voted on specific agenda items. In this manner, control over the voting process is more pronounced and ensures that the proxy holder carries out the shareholder’s wishes.
- Blank Proxy
A blank proxy allows the proxy holder to vote on all meeting matters. Shareholders may choose this method if they do not have specific instructions or rely on the proxy holder’s judgment. Of course, this does not always work in the shareholder’s best interest.
- Electronic Proxy Voting
This allows the shareholders to vote through an electronic system with the advancement of technology. Benefits of this e-proxy method of voting:
- Advantage: It allows someone to vote from any location with internet access while also preventing the attendance and mailing of paper proxies.
- Security: This online system has a mechanism to safeguard shareholder information and ensure fairness in voting.
- Efficiency: E-voting makes it easier and saves on administrative costs and processing time to have a voting procedure for shareholders and companies.
The proxy voting mechanism chosen depends on several factors, such as the level of shareholder involvement, the complexity of the issues to be voted on, and the degree of trust in the proxy holder. Understanding the different types of proxy voting allows shareholders to make informed decisions and actively participate in corporate governance.
Challenges and Issues in Proxy Voting
Although proxy voting bears merits, some problems are identified in the following.
- Information Complexity
Annual reports, financial data, and proxy statements are often detailed documents often received by retail investors from shareholders. Understanding what their votes mean in this context can become quite confusing for them.
- Proxy Advisory Firms Influence
Proxy advisory firms like ISS and Glass Lewis guide shareholders in voting in a particular direction. While such firms give precious guidance, they might tend to unduly influence the votes. Issues regarding potential conflicts of interest arise as the same advisory firm also offers consultancy services to the same firms it appraises.
- Electronic Voting Security Threats
The threat of cybersecurity also lives in electronic voting. Therefore, hacking the computerised voting system would pose an immediate threat to the integrity and confidentiality of a vote.
- Legal Compliance
Several regulations govern proxy voting. These include distributing materials to shareholders within time, reporting on the votes’ outcome, and complying with disclosure requirements. However, these can be quite cumbersome and expensive to follow, mainly for small firms.
- Shareholder Indifference
Most retail shareholders are careless when using their proxy, so participation rates in this process remain low. In such cases, decisions become imbalanced for the other shareholders, particularly institutions or activists.
Proper shareholder education, robust rules and regulations, and secure voting processes may improve such issues.
Examples of Proxy Vote
Example 1: Kirkland Lake Gold and Detour Gold Acquisition
In 2019, a Canadian gold mining company, Kirkland Lake Gold, announced a plan to buy Detour Gold by an all-share offer. The proposal needed the approval of both companies from the shareholders.
The shareholders were furnished with detailed proxy materials explaining why the acquisition should be made, its benefits, and its effects on the financial statements of both companies. The proxy vote helped win the needed approval. This case shows how proxy voting empowers shareholders to vote on major corporate decisions even if they cannot attend meetings.
Example 2: Procter & Gamble Proxy Fight
Perhaps the most famous proxy fight was between Procter & Gamble (P&G) and activist investor Nelson Peltz in 2017. Trian Partners, the firm of Peltz, wanted a board seat to be heard on the strategic direction of P&G.
Peltz campaigned aggressively and challenged investors to vote him into power by proxy. P&G’s management opposed his move for the seat and launched its effort to stay in charge. The battle ended up as one of corporations’ costliest and most bitter shareholder contests ever. It was a testimony that proxy voting is essential in resolving governance disputes.
Frequently Asked Questions
Companies use proxy voting to allow shareholders who are not present at the meeting sessions to vote on governance decisions. This allows all shareholders a fair opportunity to influence corporate policies or strategies even though they are away and cannot attend.
Proxy voting allows shareholders to authorise another person (a proxy) to vote on their behalf. Shareholders receive proxy materials explaining the meeting’s agenda and can then cast their votes via mail, phone, or online before the meeting. The proxy then represents their decisions during the meeting.
Yes, proxies can change a shareholder’s vote before the voting deadline. Such flexibility means that shareholders can alter their choice based on information or a change of circumstances. Where a shareholder casts multiple votes, the latest vote counts.
The difference here is participation. Proxy voting allows shareholders to delegate their voting rights to participate without attending the meeting. In-person voting requires physical attendance, where shareholders cast their votes directly.
Proxy advisors are organisations that provide research, analysis, and recommendations to shareholders about how to vote on corporate matters. The role is advisory, providing guidance based on corporate governance standards, financial analysis, and shareholder interests. Some examples include Institutional Shareholder Services (ISS) and Glass Lewis.
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Investing in the AI Revolution: A Guide to Semiconductor & Ecosystem ETFs
The rapid surge in artificial intelligence (AI), generative models, cloud computing, and autonomous systems has propelled semiconductors from a niche cyclical sector into the primary engine of the global technology megatrend. From graphic processing units (GPUs) and high-bandwidth memory (HBM) to advanced lithography equipment, chipmakers form the foundational hardware layer of modern innovation. For investors seeking to capture this structural growth wave without taking on single-stock concentration risk, Semiconductor ETFs (Exchange-Traded Funds) offer an efficient, liquid gateway. Source: Generative Value, 2024 1. Why Invest in Semiconductor & Ecosystem ETFs? The AI & Compute Supercycle Semiconductors are no longer tied solely to consumer electronics replacement cycles. The commercialisation of AI and high-performance computing (HPC) has initiated a multi-year capex expansion cycle among hyper-scalers and sovereign tech initiatives. S&P Global and market research benchmarks project global semiconductor industry revenues to surpass $1.5 Trillion annually by 2030, driven predominantly by AI accelerators, automotive electrification, and edge computing (Reuters, 2026). Full Ecosystem Coverage Beyond Single Giants While mega-cap chip designers frequently dominate headlines, a semiconductor ETF provides diversified exposure across the entire value chain helping capture growth opportunities across the industry's interconnected ecosystem: Fabless Chip Designers:Companies focused purely on chip architecture and software (e.g., Nvidia, AMD, Qualcomm). Pure-Play Foundries: Specialised manufacturers producing physical silicon wafers (e.g., TSMC, SMIC). Semiconductor Equipment Manufacturers: Suppliers of critical photolithography and fabrication machinery (e.g., ASML, Applied Materials, Lam Research). Outsourced Semiconductor Assembly & Test (OSAT): Advanced packaging and testing specialists critical for multi-die chip architectures. 2. Global Semiconductor ETF Landscape: US, Hong Kong & Singapore Investors can access semiconductor exposure across different listing venues depending on their geographic preference, currency choice, and structural tilt (e.g., mega-cap concentration vs. equal-weighted mid-caps). Overview of ETF Options Ticker / Exchange Name Primary Strategy / Focus Market Cap & Exposure Type Expense Ratio SMH (US) VanEck Semiconductor ETF Global Chip Leaders (US-Listed) Mega-Cap / Highly Concentrated (Top holdings 10–25%+)25-26 Companies 0.35% SOXX (US) iShares Semiconductor ETF Market-Cap Benchmark (30 Stocks) Broad Large-Cap Focus with Capped Single-Stock Weights30 Primary Companies total 34-35 holdings 0.35% SOXQ (US) Invesco PHLX Semiconductor ETF Low-Cost Benchmark (PHLX Index) Broad Large-Cap Core Exposure30-33 holdings 0.19% XSD (US) SPDR S&P Semiconductor ETF Equal-Weighted Index High Mid/Small-Cap Tilt; Reduced Single-Stock Risk46 component stocks 0.35% PSI (US) Invesco Dynamic Semiconductors ETF Factor-Based (Quant/Smart Beta) Dynamic Tilt toward Growth, Momentum & Value30-33 holdings 0.56% 3119 (HKEX) Global X Asia Semiconductor ETF Pan-Asia Chip Ecosystem Regional Focus (Taiwan, South Korea, Japan, China)40-41 holdings 0.68% 3191 (HKEX) Global X China Semiconductor ETF Domestic China Supply Chain China Onshore/Offshore Pure-Play Champions20-30 holdings 0.68% HST / HSS (SGX) Lion-OCBC Sec Hang Seng TECH ETF Broad Tech & Hardware (Hang Seng TECH) Tech Ecosystem (Includes Foundry & Tech Giants)30 holdings 0.56% a. Mega-Cap & Pure-Play Dominance (US Listed) Funds like the VanEck Semiconductor ETF (SMH) adopt a market-cap weighting scheme that allows top-tier market winners (e.g., Nvidia, TSMC) to occupy substantial percentages of the portfolio. This makes SMH ideal for investors who want aggressive exposure to frontline AI category leaders. b. Broad Market-Cap Benchmarks (US Listed) The iShares Semiconductor ETF (SOXX) and the low-cost Invesco PHLX Semiconductor ETF (SOXQ) provide structured, broad-based exposure to large, established chip manufacturers. By enforcing single-stock weighting caps (typically 8% to 12% per name), these ETFs mitigate extreme single-company downside. c. Mid-Cap, Small-Cap & Factor-Based Strategies (US Listed) Equal-Weighting (XSD): The SPDR S&P Semiconductor ETF (XSD) assigns equal weight to every constituent index member. This strategy reduces reliance on mega-cap valuations while boosting exposure to high-growth mid-cap and small-cap chip designers. Smart Beta / Factor Selection (PSI): The Invesco Dynamic Semiconductors ETF (PSI) evaluates holdings using quantitative metrics such as price momentum, earnings quality, and fundamental value. d. Asian & Regional Supply Chain Coverage (HKEX & SGX Listed) The Global X Asia Semiconductor ETF (3119.HK) focuses on Pan-Asian Manufacturing Hubs and tracks Asia-Pacific leaders across Taiwan, South Korea, and Japan. The ETF also provides targeted exposure to advanced foundry capacity and memory (HBM/DRAM) producers. The Global X China Semiconductor ETF (3191.HK) targets the China Localised Ecosystem with an emphasis on domestic Chinese semiconductor firms that accelerates localisation efforts in fabrication and equipment. The Lion-OCBC Securities Hang Seng TECH ETF (HST.SI / HSS.SI), listed on the SGX, in both SGD and USD counters, gives local investors easy, direct access to Asian tech giants and key regional foundries (such as SMIC) within a unified multi-currency instrument. 3. Key Risks in Semiconductor Investing While structural tailwinds remain compelling, semiconductor investments exhibit elevated volatility: Cyclical Demand Signals: Despite long-term AI growth, chipmaker revenues remain subject to short-term inventory corrections, demand swings in consumer hardware, and variable enterprise IT spending. Geopolitical & Supply Chain Bottlenecks: Advanced semiconductor manufacturing is geographically concentrated in East Asia. Trade restrictions, export controls on advanced lithography machinery, and national security policies can trigger rapid repricing. High Valuation Multiples: Fast-growing semiconductor design names frequently trade at elevated price-to-earnings (P/E) ratios, making them vulnerable to sharp drawdowns during interest rate spikes or temporary earnings misses. 4. Investor Checklist: Evaluating a Semiconductor ETF Before allocating capital, evaluate the following variables on the fund’s factsheet: Top Holdings Concentration: Determine if the fund is top-heavy (e.g., top 3 holdings exceeding 30–40% of total assets) or evenly distributed. Segment Allocation (Fabless vs. Foundry vs. Equipment): Check whether the fund favours chip designers (higher margins, asset-light) or equipment and foundry operators (capital intensive, structural moats). Index Weighting Rules: Confirm whether the benchmark uses pure market-cap weighting, capped market-cap weighting, or equal weighting. Expense Ratio & Trading Spread: Compare total holding costs (expense ratios range from ~0.19% to 0.68%) and check average daily trading volumes to ensure minimal bid-ask slippage. 5. Strategic Implementation for Investors Core-Satellite Portfolio Structure A practical approach to capturing the technology megatrend involves pairing a broad global equity allocation with a specialised semiconductor satellite (a satellite position is a smaller, targeted investment holding (usually 10% to 30% of a portfolio) : Core Position (70–90%): Broad global or developed market index fund (e.g., S&P 500 or MSCI World). Satellite Position (10–30%): A semiconductor ETF (SMH for mega-cap growth, XSD for mid-cap tilt, or 3119.HK / HST.SI for regional Asian diversification). Exchange Selection & Multi-Currency Flexibility Asian and Singapore-based investors can choose listing venues to optimise execution and convenience: US-Listed ETFs (SMH, SOXX, XSD): Offer the highest trading volume and lowest expense ratios, traded in USD during US market hours. HKEX/SGX-Listed ETFs (3191.HK, HST.SI): Allow trading during Asian market hours without the need for foreign exchange conversions when using local SGD or HKD counters. In Summary The semiconductor sector remains a key enabler of long-term technology trends, from artificial intelligence and cloud computing to automotive innovation and advanced manufacturing. This article has highlighted a range of semiconductor ETFs that investors may consider, each offering different levels of diversification, geographic exposure, concentration risk, liquidity, trading venues, and cost structures. When evaluating whether an ETF deserves a place in your portfolio, consider factors such as its investment objective, underlying holdings, geographic and sector exposure, expense ratio, trading liquidity, costs structure, and how well it aligns with your investment goals and risk tolerance. Investors should also assess whether the ETF provides broad industry exposure or a more concentrated bet on specific semiconductor companies or themes. References 1. https://www.reuters.com/world/asia-pacific/tsmc-says-global-chip-market-hit-15-trillion-by-2030-ai-drives-growth-2026-05-14/ 2. https://www.generativevalue.com/p/a-primer-on-semiconductor-capital DisclaimerDisclaimer 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.
Ever Glory United Holdings Ltd – Order Book Surges Past S$1bn
Brief Overview Ever Glory United Holdings delivered strong 1H26 results, with revenue and adjusted profit after tax and minority interest (PATMI) exceeding expectations at 84% and 94% of full-year forecasts respectively. The company's order book surged 220% year-on-year to more than S$1bn following the securing of over S$400mn in new contracts during 2026. Phillip Securities Research maintains a BUY recommendation with a raised target price of S$1.20. Investment Positives The primary driver of Ever Glory's growth has been the consolidation of Guthrie's results following the acquisition. The company's adjusted PATMI accelerated 208% year-on-year to S$14.1mn in 1H26, compared to 98% growth in 2H25. This growth was driven by the consolidation and recognition of Guthrie's mechanical and electrical (M&E) works, particularly progress on combined M&E projects including maintenance of street lighting and bus depot facility upgrades. The company's order book represents a significant positive, having surged more than 220% year-on-year to exceed S$1bn. Ever Glory secured more than S$400mn in new contracts during 2026, including S$168mn combined value for an offshore defence infrastructure project and M&E contracts in commercial mixed developments. This substantial order book is expected to support growth through 2029. The company has also strengthened its financial position, with net debt reducing by 86% year-on-year to S$716,000, supported by a S$19mn year-on-year increase in operating cash flow. This improved balance sheet has enabled Ever Glory to recommend interim dividends of 0.75 cents per share, representing a 29% payout ratio, compared to no interim dividend in 1H25. Investment Negatives The report does not explicitly outline specific investment negatives or risks facing Ever Glory United Holdings. Outlook Ever Glory appears well-positioned for continued growth, with management believing the company can secure additional high-value M&E contracts. Potential future awards include Integrated General Hospital projects worth more than S$200mn per M&E project, Changi T5 buildings and runway lighting worth S$1bn or more for M&E work, and LTA MRT tunnel lighting projects. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation on Ever Glory United Holdings with a raised target price of S$1.20, increased from the previous target of S$1.05. The analysts raised FY26 revenue and PATMI forecasts by 57% and 62% respectively due to the consolidation of Guthrie's results. 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.
Singapore REITs Monthly – Strong DPU Growth in 1H26
Brief Overview The Singapore REITs sector delivered a solid performance in July with the S-REITs Index gaining 3%, building on June's 0.4% increase. Results for 1H26 showed impressive strength, with S-REITs under coverage achieving approximately 6% average distribution per unit (DPU) growth year-on-year, excluding Prime US REIT's exceptional 316% growth. Phillip Securities Research maintains an overweight stance on the sector whilst remaining selective given uncertain interest rate conditions. Investment Positives The 1H26 results demonstrate the sector's underlying resilience, with DPU growth driven by three key factors. Financing costs declined by approximately 20 basis points year-on-year on average, providing material support to distributions. Operating performance remained resilient, supported by higher rents across portfolios. Additionally, completed asset enhancement initiatives (AEIs) and accretive acquisitions contributed meaningfully to growth. Individual REIT performance highlights the sector's momentum, with Suntec REIT and OUE REIT recording particularly strong DPU growth of 24.8% and 28.6% respectively, driven by lower financing costs and resilient performance across their Singapore assets. The 3-month SORA has stabilised at around 1.15%, remaining approximately 70 basis points lower year-on-year, continuing to benefit S-REITs with SGD-denominated loans through reduced borrowing costs. Transaction activity remains robust, with over S$8 billion of acquisitions and more than S$5 billion of divestments year-to-date, including significant deals such as CICT's S$3.9 billion acquisition of Paragon Mall. The retail sub-sector shows particularly strong fundamentals, with 1H26 performance characterised by near-full occupancy and rental reversions ranging from mid-single digits to low teens. This performance is underpinned by 17% growth in tenant sales, steady footfall, and limited new supply. The supply outlook remains favourable, with forecast average annual gross new supply of approximately 0.5 million square feet from 2026 to 2029, below historical averages. Investment Negatives Despite the positive momentum, analysts highlight concerns about interest rate volatility given the uncertain outlook. The macroeconomic backdrop remains volatile amid the possibility of a Federal Reserve rate hike, which could impact transaction momentum and financing costs. Outlook Analysts expect the positive momentum to continue into 2H26, forecasting approximately 4% average DPU growth for covered S-REITs, supported by organic rental growth, accretive acquisitions, and lower financing costs. Transaction activity is expected to continue but at a slower pace given macroeconomic uncertainties. For retail S-REITs specifically, FY26e rental reversions are expected to remain in the mid-to-high-single-digit range. Recommendation & Target Price Phillip Securities Research maintains an overweight recommendation on Singapore REITs, favouring those with robust balance sheets, defensive earnings profiles and high proportions of fixed-rate debt. The firm's top picks are Stoneweg Europe Stapled Trust (BUY, target price €1.89), Elite UK REIT (BUY, target price £0.41), and United Hampshire US REIT (BUY, target price US$0.69). 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. 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17LIVE Group Limited – Coverage Ceasing as Company Pursues Diversification Strategy
Brief Overview Phillip Securities Research has announced it will cease coverage of 17LIVE Group Limited following its latest results review. The company reported a 19.4% year-on-year revenue decline to US$65.4 million in 1H26, driven by falling active users and flat average revenue per user growth. Despite revenue challenges, the net loss narrowed significantly from US$4.6 million to US$1.6 million, supported by cost-optimisation efforts. The company is pursuing diversification through live commerce and AI-driven content production. Investment Positives The analyst highlights several encouraging developments for 17LIVE's operational efficiency and strategic direction. Cost-optimisation efforts have proven effective, with the company successfully narrowing its net loss by approximately 65% year-on-year from US$4.6 million in 1H25 to US$1.6 million in 1H26. This demonstrates management's ability to control expenses during a challenging period. The company's diversification strategy presents potential new revenue streams beyond its traditional livestreaming business. 17LIVE plans to expand into live commerce, which could provide additional monetisation opportunities. The company is also venturing into short-drama and AI-driven drama production, specifically targeting the Japanese market through revenue-sharing partnerships with short-drama platforms. Technology enhancements to the core business show promise for future growth. The company plans to launch AI Co-Host functionality and expand its 17Animaker tool more broadly. These innovations are designed to enhance streamer productivity and improve user engagement, potentially addressing some of the user retention challenges. Investment Negatives The core business metrics present significant concerns. Revenue declined substantially by 19.4% year-on-year to US$65.4 million in 1H26, indicating weakening demand for the company's services. This decline was driven by two critical factors: a reduction in active users and flat average revenue per user growth, suggesting both user acquisition and monetisation challenges. Profitability remains elusive despite cost-cutting measures. The company continued to be loss-making during 1H26, with earnings falling below analyst expectations compared to the FY26 forecast of US$3.8 million in profit after tax and minority interests. Outlook 17LIVE's 1H26 revenue represented 45% of the full-year FY26 forecast, indicating the company needs significant improvement in the second half to meet projections. The success of diversification initiatives, particularly in live commerce and Japanese short-drama partnerships, will be crucial for future performance. Recommendation & Target Price Following this report, Phillip Securities Research will cease coverage of 17LIVE due to the reallocation of coverage resources. No specific recommendation or target price was provided in this final coverage report. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. 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BRC Asia Ltd – PATMI accelerates, balance sheet strengthens
Brief Overview BRC Asia provided a 3Q26 update with limited financials, showing results within expectations. The company delivered 9M26 revenue and PATMI at 70% and 72% of full-year forecasts respectively. Notable developments included PATMI acceleration of 25% year-on-year to S$27.3 million, whilst revenue growth decelerated to 4.8% due to Changi T5 project timing issues. The company maintains a strong net cash position of S$60.4 million. Investment Positives BRC Asia demonstrated strong operational performance through accelerated PATMI growth of 25% year-on-year to S$27.3 million in 3Q26. This growth was driven by elevated steel rebar volumes delivered, which created operating leverage benefits. The company delivered an estimated 600,000 tons of steel rebar in 3Q26, representing a substantial 45% increase compared to the average of approximately 420,000 tons delivered quarterly over the past seven years. Profitability improvements were further supported by lower provisions for onerous contracts, contributing to gross margin expansion of 40 basis points year-on-year to 11.4%. This demonstrates the company's ability to improve operational efficiency whilst managing project risks. The balance sheet position has strengthened considerably. BRC Asia maintained its strong net cash position of S$60.4 million, improving from S$52 million in 1H26. This was supported by a significant rebound in 3Q26 operating cash flow to S$33 million, compared to negative S$8.5 million in 3Q25. This robust financial position enables the group to maintain its dividend payout ratio at 58% in FY26e, providing an attractive yield of approximately 5.5%. Investment Negatives Revenue growth momentum has decelerated significantly. 3Q26 revenue growth slowed to 4.8% year-on-year, marking the smallest growth rate since 2Q25. This deceleration was primarily attributed to reduced rebar volume growth, which dropped to approximately 3.5% year-on-year in 3Q26, compared to an estimated 46% in 2Q26. The slowdown resulted from a reorganisation of Changi T5 works, which affected project timing and delivery schedules. However, the analyst expects rebar volume delivery to strengthen in 4Q26e and into 1H27e as project offtake continues. Outlook The analyst believes BRC Asia's strong balance sheet provides sufficient headroom to maintain dividend distributions whilst supporting future growth. The temporary impact from Changi T5 project reorganisation is expected to resolve, with volume delivery anticipated to strengthen in upcoming quarters. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation with an unchanged DCF-derived target price of S$5.30. The analyst lowered FY26e revenue and PATMI forecasts by 5% and 3% respectively due to slight delays in the Changi T5 project. The WACC was reduced to 10.3% from 10.5% due to BRC Asia's stronger net cash position. 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. 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ComfortDelGro Faces Persistent Taxi Headwinds Despite UK Bus Contract Improvements
Brief Overview ComfortDelGro Corp Ltd delivered underwhelming first-half results, with 1H26 revenue and PATMI reaching only 46% and 44% of full-year expectations respectively. The company's taxi operations remain severely challenged across multiple markets, whilst the UK bus business provided some relief through contract repricing. Management maintained the interim dividend at 3.91 cents despite the earnings decline. Investment Positives The primary bright spot remains ComfortDelGro's London bus operations, specifically through Metroline. The recontracting of Metroline London contracts to higher margins has successfully driven UK earnings growth, with public transport earnings advancing 11% higher in 1H26. Approximately 70% of the repricing process has been completed, indicating further potential benefits ahead. This strategic repricing demonstrates management's ability to negotiate improved terms in at least one segment of their diversified transport portfolio. Investment Negatives Taxi operations represent the company's most significant challenge, with earnings plummeting 46% year-on-year to S$36.6 million in 1H26. The weakness spans multiple geographic markets, creating a broad-based deterioration in this core segment. In Singapore, the taxi fleet continues shrinking, whilst Australia faces soft consumer demand pressures. The UK taxi operations encountered specific disruption through the A2B premium taxi service, where a major Middle Eastern airline customer cancelled flights or operated with reduced capacity due to Middle East conflict impacts. The company's substantial acquisition strategy has failed to deliver expected results, with approximately S$850 million worth of acquisitions not producing the anticipated earnings turnaround. Operating conditions have worsened across Australia and the UK markets, suggesting systemic rather than isolated challenges. Outlook The analyst expects taxi segment weakness to persist into the second half of 2H26, indicating no near-term recovery prospects. The structural headwinds affecting taxi operations are described as both worsening and spreading across markets, suggesting deeper industry-wide challenges rather than company-specific issues. Recommendation & Target Price Phillip Securities Research maintains a NEUTRAL recommendation on ComfortDelGro Corp Ltd. The target price has been reduced to S$1.21 from the previous S$1.35, reflecting deteriorating prospects. The firm has lowered FY26 earnings estimates by 7% to S$177 million. 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. 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Hyphens Pharma International Maintains Growth Trajectory Despite Near-Term Headwinds
Brief Overview Hyphens Pharma International reported 1H26 results that met expectations, with revenue and adjusted profit after tax and minority interests (adj.PATMI) reaching 48% and 42% of full-year forecasts respectively. Revenue remained largely flat at S$89.1mn, whilst adj.PATMI declined 11% year-on-year due to increased distribution costs. The company is strategically building its product portfolio breadth and scale, though this requires higher upfront investments across multiple areas. Investment Positives The standout positive development was the achievement of record gross margins. Gross profit margin improved by 2.8 percentage points to reach a record 42.3%, driving gross profit up 6.6% to S$37.6mn. This margin expansion was supported by the company's strategic focus on higher-margin products, with prescription drugs under speciality pharma representing the highest-margin segment. The margin improvement also reflects the discontinuation of lower-margin products such as Physiolac, demonstrating management's commitment to portfolio optimisation. Key growth products driving the business forward include Cerapro MED for atopic dermatitis, Winlevi for anti-acne treatment, Ceradan for skin repair, and D-Cure vitamin D supplement. From a balance sheet perspective, Hyphens maintains a strong financial position with net cash of S$23mn, providing flexibility for continued investment and growth initiatives. Investment Negatives The primary headwind facing the company is rising operating expenses, which climbed 8% to S$30mn, representing an increase of S$2.2mn. This increase effectively offset the S$2.3mn gain in gross profit, highlighting the pressure on operating margins. The expense increases were driven by additional investments in marketing, which rose by S$1.1mn, and staff costs, which increased by S$1mn. These higher advertising and employee expenses pulled down operating profit despite the improved gross margins. Outlook Hyphens is positioned for stronger second-half earnings, with the company continuing to build the breadth and scale of its product offerings. The strategic investments in employee, marketing and research costs are expected to support longer-term growth prospects. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation on Hyphens Pharma International with a raised target price of S$0.46, up from the previous target after lowering DCF risk assumptions. The stock trades at an attractive valuation of 9x price-to-earnings ratio. 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. 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SATS Ltd Shows Strong Cargo and Food Performance Despite SoAJV Challenges
Brief Overview SATS Ltd reported strong first-quarter results with revenue and PATMI rising 11.3% and 5.9% year-on-year to S$1,676.3 million and S$75.1 million respectively, representing 28% and 25% of full-year forecasts. Cargo volumes increased 8.6% year-on-year driven by Americas demand, whilst food solutions revenue grew 5.4% supported by non-aviation expansion. Food solutions margins improved significantly by 1.6 percentage points to 14.1% despite inflationary pressures. Investment Positives The analyst highlights strong operational performance across key business segments. Cargo volumes demonstrated robust growth of 8.6% year-on-year to 2,585.1 thousand tonnes, with particularly strong performance in the Americas region showing 9.5% year-on-year growth. This expansion was underpinned by high-value, time-sensitive freight including servers, data storage units and memory chips used for AI data centre build-out. Food solutions emerged as another strong performer with revenue rising 5.4% year-on-year to S$346 million. Non-aviation food revenue showed impressive 16% year-on-year growth, supported by customer expansion in China, including Starbucks. The higher non-aviation food volumes drove greater utilisation of SATS' central kitchen and food factories, which have largely fixed costs, creating operating leverage and lowering unit costs. Additionally, ongoing repricing negotiations and a rerouting-driven benefit in the long-haul meal mix supported performance. Investment Negatives The report indicates challenges from margin compression due to elevated M&A transaction costs and SOAJV weakness stemming from low-cost carrier exposure, which resulted in an 18.8% decline in operating profit for that segment. Outlook The analyst expects normalisation in the coming quarters as margin compression from elevated M&A transaction costs and SOAJV weakness from low-cost carrier exposure should improve. Stronger food segment volumes are anticipated from effective utilisation of new facilities, with forecasts increased for FY28e and FY29e PATMI by 1% and 5% respectively. Recommendation & Target Price Phillip Securities Research maintains a BUY rating and has raised the DCF target price to S$5.01 from the previous S$4.52. SATS currently trades at 20.2x FY27e P/E. 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. 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