Dividend Discount Model
The Dividend Discount Model, also known as DDM, is one of the primary tools used for fundamental analysis when estimating the intrinsic value of a company’s stock using the present value of its future dividends. Most investors use the DDM to estimate the intrinsic value of dividend-paying stocks, especially in mature and stable markets like the US and Singapore, where dividend payout forms a key part of the investor’s return.
Table of Contents
- What is the Dividend discount model?
- Understanding the Dividend discount model
- Types of Dividend Discount Model
- Assumptions of the Dividend Discount Model
- Integrating DDM with Other Valuation Models
- Key Elements of DDM
- Types of Dividend Discount Models
- Advantages and Limitations of DDM
- Conclusion
- Frequently Asked Questions
What is the Dividend discount model?
The Dividend Discount Model (DDM) is a valuation that estimates a stock’s value as the present value of all future dividend payments. The fundamental basis for DDM is that a firm’s value is essentially linked to its ability to earn and return earnings to shareholders in the form of dividends.
In simple words, DDM expresses that the price of a stock equals the sum of all the expected future dividends. It discounts the dividends back to their present value. The stock price is taken as a reflection of future dividends and their growth expectation.
Understanding the Dividend discount model
The Dividend Discount Model is based on the concept that an enterprise’s value is synonymous with the income it provides shareholders. In highly dividend-paying US and Singapore markets, the DDM can often be a more effective way of determining whether a stock is selling at a relatively cheap or an overpriced price.
How DDM Works?
- Identify Expected Dividend Payment: The first step is always to identify the expected dividend for the next period. Most listed companies in the US and Singapore always pay regular dividends. The following is a quarterly or annual payment.
- Estimate the Growth Rate: The following estimates how they will grow over time. The growth rate is usually based on historical dividend growth, company earnings, or industry trends.
- The Present Value of Dividends: Using your estimate of dividends and growth rate, you calculate the intrinsic value of the stock using the DDM formula. The formula computes the present value of future dividends discounted back to today.
- Compare with Current Stock Price: The final step is to compare the intrinsic value derived from the DDM with the current stock price in the market. If the intrinsic value exceeds the market price, the stock may be undervalued, and vice versa.
Types of Dividend Discount Model
The Dividend Discount Model has various forms, each suited to different types of companies and dividend structures.
- Constant Growth DDM: This is also known as the Gordon Growth Model, which is one of the easiest and most used versions. In this model, dividends are grown at a constant rate into the foreseeable future. These companies usually do well where stable growth in predictability has taken place, and they can come only from mature industries.
- Two-Stage Dividend Discount Model: The Two-Stage DDM is used for companies that are expected to experience a high dividend growth rate initially, followed by a lower, stable growth rate in the long term. This model is useful for companies in transition, such as those undergoing rapid expansion or entering new markets.
- The H-Model (Hybrid Growth Model)
The H-Model is a more complex version of the Two-Stage DDM. It assumes that dividends grow rapidly for a period and then gradually slow down to a constant growth rate. The H-Model is a middle ground between the Constant Growth DDM and the Two-Stage DDM, where the growth rate transitions smoothly over time.
Assumptions of the Dividend Discount Model
The Dividend Discount Model operates under several key assumptions:
- Dividends Grow at a Constant Rate (or in a Predictable Pattern): The model assumes that dividends grow at a fixed rate, either constantly in the case of the Constant Growth DDM or at different rates over time in the case of the Two-Stage or H-Model.
- The Required Rate of Return is Constant: The required rate of return, also known as the discount rate, is assumed to be constant in the analysis. It is determined by the investor’s expected return on the market and the stock’s risk.
- The Company Will Continue Paying Dividends Indefinitely: The model assumes the company will forever continue to make dividend payments, which is not a realistic possibility for all firms, especially those in volatile markets.
- Efficient Markets: This model assumes an efficient market condition, meaning the stock price would reflect all information about a company’s future dividend payment.
Integrating DDM with Other Valuation Models
- Comparing DDM with Discounted Cash Flow (DCF): How DDM compares to DCF, which looks at the company’s free cash flow and when to use each model.
- Price-to-Earnings (P/E) Ratios and DDM: How P/E ratios can complement the Dividend Discount Model, especially for cross-checking the results with market expectations.
The Role of Interest Rates in DDM Valuations
- Impact of Rising Interest Rates: How changes in interest rates, which affect the required rate of return, influence the stock price derived from DDM.
- Economic Cycles and DDM: This section discusses how DDM valuations may change during different phases of the economic cycle (expansion, recession) and how to adjust the model accordingly.
DDM in Emerging Markets and High-Growth Companies
- Challenges in High-Growth Stocks: How to apply the DDM for companies in emerging industries or growth stocks, which may have irregular or minimal dividend payments.
- Adapting DDM for Emerging Markets: There are challenges when using DDM in regions with volatile markets, government intervention, or unstable dividend policies.
Key Elements of DDM
DPS is the amount that a company pays to its shareholders per share that the shareholder holds. It could be a constant value or differ yearly, depending upon the company’s performance.
- Discount Rate: This is the investor’s required rate of return. It will comprise the risk-free rate with an additional premium over the stock for taking the risk involved.
- Growth Rate: This is the expected annual rate at which dividends will grow. It can be constant (in the Gordon Growth Model) or variable.
Types of Dividend Discount Models
There are several variations of the DDM, each suited for different types of companies and situations:
- Gordon Growth Model (Constant Growth DDM): This is the simplest version of DDM, assuming that dividends will grow constantly. The formula is as follows:
- Multi-Stage DDM: It considers the growth rate at every stage of the firm’s life cycle. It is useful for firms that experience a growth phase at some initial level and a stable growth phase.
- Estimate Future Dividends: Predict the dividends for the foreseeable future. For the Gordon Growth Model, you need the dividend for the next year and the growth rate.
- Select a Suitable Discount Rate: This may be the investor’s required rate of return or the company’s cost of equity.
- Apply the DDM Formula: Use the formula appropriate for the type of DDM you are using to compute the present value of expected dividends.
Advantages and Limitations of DDM
Advantages
- The model is simple and intuitive.
- It concentrates on dividends that are a measurable return for shareholders.
Limitations
- The model applies only to companies with regular dividend-paying habits.
- Assuming future growth rates is somewhat difficult.
- Extremely sensitive to inputs, changes in the discount rate or the growth rate cause large swings in the valuation.
Conclusion
The Dividend Discount Model is a powerful tool for evaluating dividend-paying stocks, especially in markets like the US and Singapore, where companies often provide stable and predictable dividends. By estimating the present value of a company’s future dividends, investors can gauge whether a stock is fairly priced relative to its future earning potential. Understanding the different types of DDM, along with its assumptions and applications, allows investors to make informed decisions about dividend stocks, maximising returns while managing risks effectively.
Frequently Asked Questions
The Dividend Discount Model calculates the present value of expected future dividends, assuming that a company’s stock price is based on its ability to generate dividends over time.
The Constant Growth DDM assumes that a company’s dividends will grow at a constant rate indefinitely. It is often used for stable, mature companies with predictable dividend growth.
The required rate of return is typically calculated using the Capital Asset Pricing Model (CAPM), which considers the risk-free rate, the stock’s beta (volatility relative to the market), and the market’s expected return.
The growth rate is often based on historical dividend growth, the company’s earnings growth, or industry trends. Analysts may rely on long-term estimates of economic growth and inflation for mature companies.
Dividend policy is critical in the DDM valuation because the model hinges on the assumption that dividends will continue to be paid and grow. A company that reduces or eliminates dividends can significantly impact its DDM-based valuation.
Related Terms
- Merger Arbitrage
- Intrinsic Value of Stock
- Callable Preferred Stock
- Growth Stocks
- Market maker
- Authorized Stock
- Stock Shifts
- Seasoned Equity Offering
- Price to Book
- Stock Price
- Consumer Stock
- Undervalued Stocks
- Tracking Stock
- Income stocks
- Hang Seng Index
- Merger Arbitrage
- Intrinsic Value of Stock
- Callable Preferred Stock
- Growth Stocks
- Market maker
- Authorized Stock
- Stock Shifts
- Seasoned Equity Offering
- Price to Book
- Stock Price
- Consumer Stock
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- Tracking Stock
- Income stocks
- Hang Seng Index
- Rally
- Ticker Symbol
- Defensive stock
- Earnings Guidance
- Wire house broker
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- Options expiry
- Payment Date
- Treasury Stock Method
- Reverse stock splits
- Ticker
- Restricted strict unit
- Gordon growth model
- Stock quotes
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- Whisper stock
- Voting Stock
- Deal Stock
- Microcap stock
- Capital Surplus
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- Secondary stocks
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- Stock market crash
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- Foreign exchange markets
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- Garbatrage
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- Common Stock
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- Earnings Per Share (EPS)
- Diluted Earnings Per Share
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- Averaging Down
Most Popular Terms
Other Terms
- Bond Convexity
- Compound Yield
- Brokerage Account
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- Industry Groups
- Growth Rate
- Green Bond Principles
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- Funding Ratio
- Free-Float Methodology
- Foreign Direct Investment (FDI)
- Floating Dividend Rate
- Flight to Quality
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- Option Adjusted Spread (OAS)
- Non-Diversifiable Risk
- Liability-Driven Investment (LDI)
- Income Bonds
- Guaranteed Investment Contract (GIC)
- Flash Crash
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- Cost of Equity
- Cost Basis
- Deferred Annuity
- Cash-on-Cash Return
- Earning Surprise
- Capital Adequacy Ratio (CAR)
- Bubble
- Beta Risk
- Bear Spread
- Asset Play
- Accrued Market Discount
- Ladder Strategy
- Junk Status
- Interest-Only Bonds (IO)
- Interest Coverage Ratio
- Inflation Hedge
- Industry Groups
- Incremental Yield
- Industrial Bonds
- Income Statement
- Holding Period Return
- Historical Volatility (HV)
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- Fallen Angel
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Singapore Equities Show Strong Momentum as AI Cycle Drives Growth, Banks and Semiconductors Favoured
Market Performance and Outlook Singapore equities have demonstrated robust performance, posting their fourth consecutive quarter of gains with a 5.8% rise in 2Q26. The market reached record highs on 25th June and was up 11.3% for the first half of 2026. The ceasefire in the Middle East has particularly benefited transportation stocks, whilst increased volatility supported exchanges and banking shares. Expectations of bottoming interest rates have further rallied banking stocks, though energy-related equities have faced pressure from sluggish oil and gas capital expenditure and falling energy prices. AI Investment Cycle: Booming Not Bubbling Phillip Securities Research maintains that current market conditions do not constitute an AI bubble. The firm identifies several key factors supporting this view. Massive AI and data centre capital expenditure by hyperscalers, including Oracle and Meta, is expected to rise 73% in 2026 and 22% in 2027, cascading into substantial semiconductor purchases with billings rising 86% year-to-date to reach an annualised US$1 trillion . Wafer fabrication capital expenditure is projected to jump 40% year-on-year to US$175 billion. The driving force behind this spending stems from frontier AI models, particularly Anthropic and OpenAI, whose combined revenue could total US$85 billion this year. Under an S-curve growth trajectory, revenue is expected to reach US$300 billion by 2030, justifying the capital expenditure spike. Current technology sector valuations remain significantly below dot-com bubble levels, with Nvidia trading at 24 times price-to-earnings compared to Cisco's peak of 150 times forward price-to-earnings in 2000. Investment Strategy and Sector Preferences The research house favours banks, semiconductors, building materials, power, and higher-yielding REITs. Banking stocks benefit from resilient dividend yields of around 4% and loan growth surging towards 8% year-on-year, a four-year high. A major spike in deposits following the Middle East conflict, with March recording a S$66 billion jump compared to the prior five-year monthly average of S$9 billion , should help lower funding costs. Semiconductor stocks are expected to register the fastest growth, fuelled by record demand from key equipment customers including ASML, Applied Materials, and Lam Research. In construction, whilst order momentum has slowed, activity has increased, supporting a 29% rise in ready-mixed concrete demand. 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.
ETF Monthly Outlook: Sideways Consolidation Expected Across Most Asset Classes in July 2026
Market Overview and Performance Summary The ETF market landscape presents a mixed picture heading into July 2026, with most major asset classes expected to enter periods of sideways consolidation following varied performance in June. According to the latest monthly analysis, investors should prepare for range-bound trading across several key exchange-traded funds tracking major indices and commodities. Asset Class Performance Analysis Equities showed divergent trends during June, with the Vanguard S&P 500 ETF (VOO) ending two consecutive months of gains with a 0.9% decline. The fund is expected to extend its sideways consolidation from June into July as markets digest recent moves. In contrast, Singapore equities demonstrated strength, with the SPDR Singapore Equities ETF (ES3) posting its third consecutive monthly gain of 3% in June, though analysts expect consolidation after the ETF reached target levels. Fixed income markets remained relatively stable, with the iShares 7-10 Year Treasury Bond ETF (IEF) trading flat during June. The bond ETF is anticipated to remain range-bound between US$93.40 and US$95.40 in July, extending a sideways consolidation pattern that has persisted since mid-March. Commodities faced significant headwinds, particularly in the precious metals sector. The SPDR Gold MiniShares Trust (GLDM) recorded its fourth consecutive monthly decline, tumbling 11.6% in June. Despite this weakness, analysts expect sideways consolidation in July, with support likely to hold at US$77.50 should the price retest the swing low from October 2025. Energy sector weakness continued, with the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) falling 5.4% in June, marking its third consecutive monthly decline. The ETF is expected to consolidate sideways in July, with support anticipated in the US$148 to US$154 area. Notable Underperformers The cryptocurrency space showed particular vulnerability, with the ProShares Bitcoin Strategy ETF (BITO) tumbling 20.2% in June, marking its second consecutive monthly decline. Unlike other asset classes, Bitcoin ETFs are expected to continue their bearish trend in July, potentially retesting the US$7.44 swing low from August 2024, representing a 6.7% downside from current levels. Asian markets also faced pressure, with the Hang Seng China Enterprises Index ETF (2828) declining 9.6% in June for its second consecutive monthly drop. However, sideways consolidation is expected, with support between HKD$74.65 and HKD$77.10. 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.
Software Sector Remains Resilient Amid AI Disruption Concerns
Market Performance and Sector Dynamics The software sector experienced notable volatility in the first quarter of 2026, with the iShares Expanded Tech-Software Sector ETF (IGV) declining 20% year-to-date despite a 4% quarter-on-quarter recovery. This performance significantly lagged the S&P 500's 8% gain, reflecting investor concerns about higher capital expenditure guidance and a rotation towards AI infrastructure plays. Within the ETF, performance diverged sharply across different software categories. Cybersecurity leaders Palo Alto Networks (PANW) and CrowdStrike (CRWD) outperformed, alongside data analytics companies MongoDB (MDB) and Snowflake (SNOW). However, traditional software-as-a-service (SaaS) companies faced significant pressure, with Palantir declining 40%, Adobe falling 44%, and Salesforce dropping 43% amid SaaS derating and concerns about agentic AI disruption. Fundamental Strength Persists Despite market pessimism surrounding potential AI disruption, the underlying fundamentals of the software sector remain robust. SaaS companies delivered their strongest revenue performance in 14 quarters, with last-12-months revenue growth accelerating to 17% year-on-year in the first quarter of 2026, representing a 4.4 percentage point improvement from the previous year. Large-cap SaaS companies demonstrated particular resilience, maintaining 17% year-on-year growth while preserving superior profitability metrics. This performance suggests that market leaders have experienced limited disruption from AI technologies, contrary to broader market concerns about sector-wide displacement. Investment Strategy and Outlook Phillip Securities Research maintains an OVERWEIGHT rating on the software sector, focusing on three key areas positioned to benefit from AI adoption: SaaS infrastructure, cybersecurity, and data analytics. Top stock picks include Microsoft, Oracle, Palantir, and Palo Alto Networks, supported by strong AI and cloud adoption trends, robust demand visibility, and growing cybersecurity requirements. The current valuation environment presents opportunities, with large-cap SaaS companies trading at EV/Sales ratios of 9.5 times, representing the negative one standard deviation level despite rising software revenue and net income. The strategy emphasizes companies that provide essential AI infrastructure, maintain mission-critical cybersecurity functions, and offer data analytics capabilities crucial for enterprise AI implementation. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
UltraGreen.ai Positioned for Growth with ICG Platform Expansion, BUY Rating and US$1.92 Target Price
Phillip Securities Research has initiated coverage on UltraGreen.ai with a BUY rating and target price of US$1.92, highlighting the company's transformation from a traditional dye and hardware business into an integrated indocyanine green (ICG) platform. The research firm's valuation is based on DCF analysis, utilising a 10% WACC and 7 times exit multiple. The company is currently trading at FY26e forward P/E of 15.2 times and EV/EBITDA of 16 times. Company Overview UltraGreen.ai operates in the fluorescence-guided surgery market, providing ICG dyes and near-infrared imaging hardware to healthcare providers. The company is expanding its business model beyond commodity products to become a comprehensive ICG platform provider, incorporating data analytics and software solutions. Market Opportunity and Penetration Drivers Strong market tailwinds are driving greater ICG penetration across both established and emerging surgical procedures globally. Currently, ICG penetration across surgical procedures remains in the low double-digits, with the exception of choroid diagnostics. However, penetration rates are expected to increase by double digits across the majority of procedures using fluorescence-guided surgery by 2028. The primary driver for this expansion is the growing adoption of ICG as a standard of care, with major surgical societies incorporating ICG into their clinical guidelines. A significant catalyst for UltraGreen.ai will be the expiry of Novadaq's Breast Sentinel Lymph Node exclusivity in June 2026, enabling the company to file for US approval and potentially capture a US$66.2 million market opportunity at full ICG penetration. Platform Business Transformation UltraGreen.ai is strategically expanding from its traditional dye plus hardware business into an integrated ICG platform through its PerfusionWorks quantification software and cloud platform. The PerfusionWorks software is expected to receive Europe MDR regulatory approval by 2H26, with subsequent US FDA filing planned to use the European dataset. Notably, the software is camera agnostic and can be used with competitors' imaging hardware, making every near-infrared-capable imaging device a potential customer. This approach addresses the critical obstacle of subjectivity in fluorescence imaging assessment by providing objective and reproducible perfusion data, thereby facilitating standardisation required for broader ICG adoption as a standard of care. Growth Strategy and Financial Position The company maintains a robust financial position, with net cash of US$176.1 million and is pursuing growth initiatives worth approximately US$150 million in potential investments or acquisitions across API suppliers, distributors, and lyophilisation companies. UltraGreen.ai also plans to transition from distributor models to direct sales in select markets, reducing distributor fees and enabling direct hospital relationships. This would support the bundling ICG vials with NIR cameras and cross-selling PerfusionWorks software. The research forecasts a 2-year earnings CAGR of 18.6%. 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.
Company Overview Thai Beverage PLC operates as one of Southeast Asia's leading beverage companies, with significant operations spanning alcoholic beverages, including beer and spirits, as well as non-alcoholic products. The company has established itself as a major player in the regional market through its diverse portfolio and strategic investments, including its position as the second-largest shareholder in Vinamilk, one of the Vietnam’s largest dairy companies. Strategic Response to Consumer Pressures Thai Beverage is implementing a comprehensive five-pronged strategy to address the current challenging consumer environment. The company is focusing on smaller pack sizes and stock-keeping units (SKUs) to achieve more affordable price points, recognising that consumers are searching for value during this difficult period. The strategy extends to health and wellness through protein-based non-alcoholic products, whilst offering greater convenience through ready-to-drink (RTD) spirits. The RTD spirits initiative represents a particularly strategic move, as it does not cannibalise existing distilled spirits sales but instead makes products more accessible and convenient for consumers. This category can attract consumers from the beer segment whilst delivering higher gross margins due to lower excise duties compared to beer. Importantly, existing manufacturing capacity already supports RTD spirits production, requiring minimal additional capital expenditure. Financial Outlook and Market Position The company's financial position is expected to strengthen as free cash flow improves following major capital expenditure over the past two years in Cambodia and a dairy farm in Malaysia. This improved balance sheet provides flexibility for potential acquisitions, whilst forward purchases of raw materials are largely hedged for the current financial year's requirements. Phillip Securities Research maintains a BUY recommendation with a target price of S$0.53, highlighting Thai Beverage’s attractive valuations at 10 times FY26e earnings, with a dividend yield of approximately 5.5%. Margins are expected to remain resilient due to lower-priced raw materials purchased and disciplined operating cost management. The potential spinoff of Beerco presents an asset monetisation opportunity, particularly given Southeast Asia's, especially Vietnam's, attractiveness to strategic investors as a growing consumer market. 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.
Micron Technology Benefits from AI Memory Demand and Tight Supply
Company Overview Micron Technology, Inc. is a leading semiconductor company specializing in memory solutions, producing both DRAM and NAND flash memory products for various applications including mobile, client, and automotive markets. Strong Financial Performance Driven by ASP Surge Micron delivered exceptional third-quarter FY2026 results, with adjusted profit after tax and minority interests spiking 12.2 times year-on-year to a record US$28.9 billion. This remarkable performance was underpinned by 41% year-on-year bit shipment growth and substantial average selling price (ASP) increases, estimated at 215% for DRAM and 272% for NAND products. The nine-month FY2026 revenue and adjusted PATMI reached 73% and 72% of full-year forecasts respectively, indicating strong momentum. Revenue surged to US$42 billion whilst profit margins expanded significantly, with gross margins reaching 84.9%, driven primarily by the higher ASPs across both memory segments. Strategic Customer Agreements Reduce Cyclicality A key positive development is Micron's progress in securing long-term strategic customer agreements (SCAs). The company has signed 16 such agreements to date, covering approximately 20% of DRAM volume and 30% of NAND volume from 2026 to 2030. These agreements represent US$100 billion in remaining performance obligations, equivalent to 2.7 times FY25 revenue, with US$22 billion in cash deposits and financial commitments from customers. The SCAs include price bands with floor prices that enable higher gross margins than Micron's historical peak of 63%. This structure provides greater revenue visibility and reduces the company's traditional cyclical exposure, although approximately 75% of revenue remains subject to cyclical demand patterns in mobile, client, and automotive segments. Market Dynamics Support Pricing Power Memory supply remains constrained due to lengthy lead times for new fabrication facility expansions, which typically require 2 to 4 years, alongside persistent cleanroom space limitations. Customers are prioritizing volume security over price considerations, leading major players including Samsung, SK Hynix, and Micron to sign longer-term contracts spanning 3 to 5 years, compared to typical one-year commitments historically. Investment Recommendation Phillip Securities Research maintains a BUY rating with a raised target price of US$1870, reflecting increased FY27 revenue and PATMI forecasts raised by 16% and 23% respectively. The valuation assumes a 14 times FY27 price-to-earnings ratio, representing a 52% discount to peers' average forward P/E of 29 times, acknowledging the remaining cyclical exposure in non-SCA revenue streams. 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.
Save on Brokerage Fees When Trading with CPF/SRS Funds
If you want to invest using your CPF Investment Account (CPFIS) or Supplementary Retirement Scheme (SRS) funds, you can choose between our Cash Plus Account and Cash Management Account. Both account types allow you to trade using your CPF/SRS monies. Read on to find out how they differ! Cash Plus Account Cash Plus Account offers a significantly lower brokerage rate of 0.08% with no minimum commission for trading on the SGX market. To place a BUY order, you will need to prefund your account with cash. A minimum of 50% of the expected trade value* is required as buying power before a trade can be placed or submitted online. The good news is that cash is only required temporarily. Once the CPF/SRS trade is settled, the prefunded amount can be withdrawn or used for the next trade. This could potentially result in significant cost savings for smaller trades and Dollar Cost Averaging (DCA) strategy! *Full amount is required for non-marginable counters Cash Management Account Cash Management Account offers greater convenience as no prefunding is required. We will increase your trading limit after reviewing your CPF/SRS statements. This allows you to place trades directly using the approved trading limit. However, the brokerage fee is higher at 0.28%, subject to a minimum commission of S$25. Example: BUY 100 shares of DBS at S$64.38 per share Trade Value: S$6,438 Under Cash Management Account: Approx. Brokerage Fee: S$25 (Minimum commission applies) Under Cash Plus Account: Approx. Brokerage Fee: S$5.20 By prefunding the required amount on Cash Plus Account, you could save approximately SGD 20 on brokerage fees for this trade alone. Which account should you choose? If you are comfortable prefunding your account with cash, the Cash Plus Account can help you reduce trading costs substantially. The prefunded cash can be withdrawn after the CPF/SRS transaction has been settled. If you prefer the convenience of trading without prefunding, Cash Management Account may be more suitable, although the brokerage charges will be higher. For investors looking to minimize trading costs, the Cash Plus Account is generally the more cost-effective option. 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.
The True Zero: More Than Just Savings
What Would You Do With Zero? The best time to start investing was yesterday. The second-best time is today. Now, with our US$0 commission trading on POEMS, investors can focus more on opportunities and less on transaction costs. For many first-time investors, the hesitation is not a lack of interest. Instead, it is the thought of paying a commission on every trade, especially when the investment amount is small. This creates a false impression that investing only makes sense when there is a larger pool of capital. The absence of commission fees changes this dynamic. When commission fees are removed, getting started on investing becomes easier. Investors have one less reason to hesitate and can begin with the amount they are comfortable with, invest consistently over time, and respond to market opportunities without having to factor trading costs into every decision. Freedom To Start Small Many people think investing is something you do once you have accumulated enough capital. But waiting for "enough" is often what prevents people from investing in the first place. Successful investing is not about starting with a large amount. It is more about starting early and staying consistent. Consider investing just US$100 a month. Over 20 years, the amount accumulated may surprise you. Not because US$100 is a large sum, but because time, consistency, and compounding work together to build wealth over the long term. To illustrate, the table below uses a 7% annual return, based on the S&P 500's long-term historical average, alongside a typical savings account interest rate of 1.8% p.a. While past performance does not guarantee future results, it serves as a useful benchmark to demonstrate the potential impact of long-term investing. Year Total Contribution (US$) Invested (7% p.a.) (US$) Saving Account (1.8% p.a.) (US$) 1 1,200 1,239 1,210 5 6,000 7,159 6,273 10 12,000 17,308 13,137 15 18,000 31,696 20,647 20 24,000 52,093 28,863 Actual returns will vary and are not guaranteed. Investing involves risk, including the possible loss of principal. With US$0 commission on POEMS, investors can put smaller amounts to work without having to consider whether trading costs outweigh the value of their investment. Whether you are investing $50 or $500, the ability to start small makes it easier to build disciplined investing habits over time. Time in the market can have a greater impact on long-term outcomes than the size of the initial investment. The key is not how much you start with, but having the confidence to take the first step. Freedom To Turn Headlines Into Investments Every day, investors are exposed to headlines on artificial intelligence breakthroughs, technology IPOs, cybersecurity advances, semiconductor developments, and the growing space technology. These stories are hard to ignore and naturally prompt investors to take action. Thematic ETFs help by offering targeted exposure to sectors and industries shaped by long-term structural trends. Instead of researching and selecting individual companies, investors can gain diversified exposure through a single investment. Whether it is artificial intelligence, semiconductors, or space technology, thematic ETFs allow investors to translate ideas sparked by headlines into actionable opportunities. In the past, acting on such ideas often came with a hidden cost. Commission fees made smaller, exploratory investments harder to justify, causing many investors to stay on the sidelines while trends unfolded. With US$0 commission, investors can now explore emerging themes without the barrier of transaction costs. This allows for smaller positions, gradual conviction-building, and more flexible portfolio construction over time. After all, ideas are only as valuable as the ability to act on them. Freedom To Stay Consistent Successful investors often have one thing in common: consistency. Instead of chasing market highs and lows, they invest regularly through monthly contributions, dollar-cost averaging, and long-term portfolio building. These habits compound over time, but they are most effective when investors maintain them consistently. Historically, commission fees created friction by adding a cost to every transaction, discouraging frequent, smaller investments. With US$0 commission, that obstacle is removed, and makes it easier for investors to commit to regular contributions, stay the course through market volatility, and build their portfolios steadily without eroding returns at the point of entry. Consistency beats complexity. When the cost to stay consistent is zero, it becomes easier to invest for the long term. Freedom To Own The Future: Understanding Your Financial Needs Everyone’s investment journey is different. Investing carries risk, and understanding your own financial situation is the first step to navigating it well. Factors such as risk tolerance, your investment horizon, and investment objective should shape the decisions you make along the way. The US$0 commission removes one variable from that equation, meaning your decisions can be driven by opportunity and strategy, rather than transaction costs. Now, investors can start small, act on ideas and stay consistent with greater flexibility. With US$0 commission on POEMS Cash Plus, accessing these opportunities becomes more convenient and cost-efficient. Whether you are just starting or building on an existing portfolio, now may be a good time to take the next step. Invest in US stocks with zero commission through POEMS Cash Plus here. All investments carry risk. Please ensure you understand your own financial situation and risk tolerance before investing. References: 1. https://www.sofi.com/learn/content/average-stock-market-return/ 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.
