Trading Strategy
Trading in financial markets is an art and science. Many things need to be done carefully in both preparation and execution. One of the core elements of successful trading is a trading strategy. A systematic plan leading to trader decisions based on specific, predefined rules defines it. The article goes deeper into trading strategies, providing beginners a full comprehension of understanding, developing, and applying such strategies.
Table of Contents
What is a Trading Strategy?
A trading strategy is an explicit plan to participate in purchasing and selling assets in financial markets. It mainly focuses on gaining profit along with managing risk in an uncompromising manner. Any good trading strategy would broadly be considered to comprise of the following:
- Market Analysis: In-depth analysis of prevailing trends, conditions, and market patterns
- Entry and exit criteria: The explicit rule conditions state the requirements for purchasing and selling a security.
- Risk Management: Strategies that could limit possible losses while protecting capital.
- Performance Analysis: Continuous examination that examines the strategy’s efficacy.
Whatever investment, be it equities, currencies, or commodities, this strategy offers a set direction while making decisions, which ensures more rationality in opposition to emotions.
Understanding Trading Strategy
Trading strategies are typically segregated into two categories.
- Discretionary Trading
Discretion in trading is based upon intuitive ability, experience, and personal judgment of the trader. Traders relying on this type always make sense out of the market’s signals, news, or trends while deciding. Despite the flexibility, this type calls for a deep sense of the market and strong discipline at their command.
- Systematic Trading
Systematic trading involves executing trades based on predetermined rules, which can also be automated through algorithms. It saves traders from emotional biasing and allows them to process large amounts of data efficiently.
There are two major analytical methods that traders use in the process of building a good trading strategy:
Technical Analysis:
Technicians rely on past price movements and developments to forecast future price trends. Moving averages, RSI (Relative Strength Index), candlestick patterns, and other technical indicators are some of the commonly used tools in this analysis.
Fundamental Analysis:
This approach looks at the underlying drivers that determine an asset’s value, which can be economic data, company financials, and industry trends. It helps determine whether an asset is overvalued or undervalued.
A good trading strategy has:
- Clear objective: It is defined with no ambiguity.
- Consistent: Reliability in performing under similar market conditions.
- Quantifiable: The outcome can be measured and analysed.
- Verifiable: Its past performance can be used to backtest it to assess its performance
Types of Trading Strategies
The choice of trading strategy involves many factors, such as acceptable levels of risk, market situations, and available time. Here are some of the most usual trading strategies:
- Day Trading
Day traders open and close positions within one trading day and do not carry any risk overnight because this strategy involves small-scale price movements and requires total concentration and swift decision-making.
Example:
A trader tracks the share price of Tesla Inc. (TSLA) to detect short-term fluctuations and uses technical indicators like Bollinger Bands for this purpose. Here, buying is done upon hitting the lower band, and selling is done after reaching the upper band.
- Swing Trading
Swing traders establish positions for a few days or weeks to benefit from medium-term price movements. A swing trader relies on technical and fundamental analysis to pick trends and reversals.
Example:
A trader spots a bullish engulfing pattern in Microsoft Corp. (MSFT) and goes long on the shares, hoping the stock will rise over the subsequent week.
- Position Trading
This long-term approach keeps positions for weeks, months, or even years. Position traders pay more attention to macroeconomic trends and a company’s fundamentals and ignore short-term noise.
Example:
A trader invests in Amazon.com Inc. because he believes the company’s long-term prospects far outweigh short-term fluctuations in the market.
- Scalping
Scalpers make multiple trades in a day by aiming to profit from tiny price movements by making a few pennies. This requires high-end trading systems, very low transaction costs, and fast execution.
Example:
A trader scalps the SGX Nifty futures when price spreads narrow due to high liquidity periods, making rapid trades.
- Algorithmic Trading
Algorithmic trading, on the other hand, executes trades through computer programs according to predefined criteria. An algorithm can process large quantities of data and make trades in less than a millisecond, which is why it is popular in high-frequency trading.
Example:
An algorithm is programmed to buy Apple Inc. shares when the 50-day moving average crosses above the 200-day moving average, which signals a bullish trend.
- Trend Following
Trend followers enter trades toward established market trends for profit opportunities. They exit their trades once signals of a reversal show.
Example:
An individual follows an established uptrend in gold’s price and buys after the price retreats; to close the profits, a trader uses trailing stop-loss orders.
- Range Trading
Range traders identify the level at which the asset’s price oscillates constantly: the support level at which they buy and the resistance level at which they sell.
Example:
A trader finds a range for Netflix Inc. stock between US$300 and US$350. They buy when the price approaches US$300 and sell at US$350.
Risk Management in Trading
No trading strategy is complete without a good risk management plan. Trading intrinsically involves risk, and effective risk management is critical to protect capital and ensure long-term success.
Critical Risk Management Practices:
- Position sizing:
Size each trade to a given percentage of the portfolio, taking as a common guideline the 1-2% rule-that is, risk only 1-2% of the portfolio on a given trade.
- Stop-Loss Orders:
The stop-loss order automatically closes a trade when the price reaches a predetermined level, thereby limiting possible losses.
- Diversification:
Investment should be spread across various assets or sectors so that poor performance in one area only affects a little.
- Risk-Reward Ratio:
The reward potential of a trade in comparison to the risk. In most instances, the ratio employed is 2:1. Therefore, the reward has to be at least double the probable loss.
- Regular Performance Reviews:
Perpetually review and adapt strategies given performance metrics and prevailing market conditions
Examples of Trading Strategies
- Example of Day Trading
A day trader is focused on Amazon.com Inc. (AMZN) stock, using the Relative Strength Index (RSI) to catch an oversold situation at US$100. He believes the price will bounce back, so he purchases some shares and puts a stop-loss order at US$98 to cap his potential loss. The stock now jumps up to US$105. He sells at US$105 and thus gains US$5 per share.
- Swing Trading Example:
A swing trader examines the candlestick chart for Alphabet Inc. (GOOGLE) and discovers the “double bottom,” which is frequently a signal of an upward reversal. He buys it at US$130, expecting the price to take off. When the share price reaches US$150, that is, to the resistance level, that is when it sells and makes US$20 per share
- Example of Algorithmic Trading:
Algorithmic trading automates the analysis and execution of the trades as per predefined rules. A good example would be considering a trading algorithm that monitors the currency pair, US$/SGX, and forex. It auto-buys when the price has exceeded the moving average for 20 days and auto-sells if the price goes down from the 50-day moving average. This ensures very prompt decisions and rules out any emotional trading, which leads the trader to benefit from good, consistent trends in currency.
Frequently Asked Questions
A trading strategy provides a structured framework to eliminate emotional decisions and guesswork. It ensures traders maintain discipline, manage risks effectively, and achieve consistent results even in volatile market conditions, increasing the likelihood of long-term success in trading.
For instance, risk tolerance, time commitment, prevailing market conditions, and financial goals may all have been needed to orient such a strategy toward an individual’s specific requirements. It should then be based on the realities of the markets.
Technical analysis forecasts price movements by studying historical price and volume data. Using moving averages, MACD, and chart patterns, traders can identify trends, support and resistance levels, and potential entry or exit points for trades.
A fundamental analysis determines an asset’s intrinsic worth based on economic data, financial performance, and industry trends. Factors include revenue, earnings, and market conditions, which can help determine whether an asset is undervalued or overvalued.
Risk management focuses on loss minimisation using stop-loss orders, investment diversification, careful position size determination, and regular performance monitoring. Above all, it ensures capital protection and sustainable trading.
Related Terms
- Gamma Scalping
- Free-Float Methodology
- Flight to Quality
- Equity Carve-Outs
- Ladder Strategy
- Event-Driven Strategy
- Dividend Capture Strategy
- Credit Default Swap (CDS)
- Company Fundamentals
- Buy And Hold Strategy
- Withdrawal Plan
- Basis Risk
- Barbell Strategy
- Risk budgeting
- High-Yield Investment Programs
- Gamma Scalping
- Free-Float Methodology
- Flight to Quality
- Equity Carve-Outs
- Ladder Strategy
- Event-Driven Strategy
- Dividend Capture Strategy
- Credit Default Swap (CDS)
- Company Fundamentals
- Buy And Hold Strategy
- Withdrawal Plan
- Basis Risk
- Barbell Strategy
- Risk budgeting
- High-Yield Investment Programs
- Risk Appetite
- Portfolio Diversification
- Closing Transaction
- Replication Strategy
- Correlation Coefficient
- Currency hedge
- Automatic Investment Plan
- Automatic Reinvestment
- Core-Satellite Strategy
- Overlay Strategy
- Long/Short Strategy
- Strategic Asset Allocation
- Tactical Asset Allocation
- Gearing
- Dividend stripping
- Resting Order
- Buy to opening
- Buy to Close
- Yield Pickup
- Contrarian Strategy
- Interpolation
- Intrapreneur
- Hyperledger composer
- Horizontal Integration
- Queueing Theory
- Homestead exemption
- The barbell strategy
- Retirement Planning
- Credit spreads
- Stress test
- Accrual accounting
- Growth options
- Growth Plan
- Advance Decline Line
- Accumulation Distribution Line
- Box Spread
- Charting
- Advance refunding
- Accelerated depreciation
- Amortisation
- Accrual strategy
- Hedged Tender
- Value investing
- Long-term investment strategy
Most Popular Terms
Other Terms
- Bond Convexity
- Compound Yield
- Brokerage Account
- Discretionary Accounts
- Industry Groups
- Growth Rate
- Green Bond Principles
- Funding Ratio
- Foreign Direct Investment (FDI)
- Floating Dividend Rate
- Real Return
- Protective Put
- Perpetual Bond
- Option Adjusted Spread (OAS)
- Non-Diversifiable Risk
- Merger Arbitrage
- Liability-Driven Investment (LDI)
- Income Bonds
- Guaranteed Investment Contract (GIC)
- Flash Crash
- 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
- Junk Status
- Intrinsic Value of Stock
- Interest-Only Bonds (IO)
- Interest Coverage Ratio
- Inflation Hedge
- Industry Groups
- Incremental Yield
- Industrial Bonds
- Income Statement
- Holding Period Return
- Historical Volatility (HV)
- Hedge Effectiveness
- Flat Yield Curve
- Fallen Angel
- Exotic Options
- Execution Risk
- Exchange-Traded Notes
- Eurodollar Bonds
- Enhanced Index Fund
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Phillip SING Income ETF Reaches All-Time High Dividend with Banking Sector Focus
Brief Overview Phillip Securities Research maintains an ACCUMULATE recommendation on Phillip SING Income ETF (SINGINC) with an increased target price of S$1.82, up from the previous S$1.59. The ETF has experienced portfolio rebalancing with increased banking sector concentration, while DBS Group and Singapore Exchange remain key holdings alongside new top holding Oversea-Chinese Banking Corporation. The firm remains constructive on SINGINC as its dividend reaches an all-time high, supported by stronger distributions from the portfolio. Investment Positives The primary strength of SINGINC lies in its dividend performance, which has reached an all-time high. This achievement is underpinned by stronger distributions from the portfolio, particularly benefiting from the ETF's large exposure to Singapore banks. The ETF demonstrates strong diversification across six sectors, with financials representing the largest allocation at 44.2% and REITs comprising 21.8% of the portfolio. This diversified approach provides balanced exposure across Singapore's key income-generating sectors. Recent portfolio changes reflect strategic positioning towards Singapore's banking sector. Oversea-Chinese Banking Corporation has become the largest holding at 11.4%, while DBS Group's weight increased slightly from 10.3% to 10.7%. This greater concentration in Singapore's banking sector among the portfolio's largest positions, places the ETF to benefit from the sector's performance. Looking ahead, resilient bank earnings and dividends are expected to continue supporting income generation. Additionally, a more favourable interest-rate environment for REITs should enhance the performance of the ETF's second-largest sector allocation. Outlook Phillip Securities Research maintains a constructive outlook on SINGINC. The combination of resilient bank earnings and dividends, alongside a more favourable interest-rate environment for REITs, should continue supporting income generation. Singapore's market revitalisation initiatives are expected to provide an additional catalyst for performance. Recommendation & Target Price Phillip Securities Research maintains an ACCUMULATE recommendation on Phillip SING Income ETF. The target price has been increased to S$1.82 from the previous S$1.59, derived using equal weightage between historical dividend yield spread valuation (S$2.20) and price-to-earnings ratio valuation (S$1.44). Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Phillip Securities Sees Singapore Banks Delivering Robust Performance Despite Margin Pressures
Brief Overview Phillip Securities Research highlights that Singapore interest rates climbed for the third consecutive month in July, with loan growth surpassing 9% year-on-year for the first time since COVID. The firm's second quarter 2026 bank earnings analysis shows performance exceeded expectations, driven by record fee and trading income, despite continued net interest income (NII) declines. The research house maintains its positive stance on the sector while acknowledging mixed guidance updates from major banks. Investment Positives The team identifies several compelling reasons for optimism in Singapore banking. Loan growth has become a significant positive catalyst, crossing the 9% year-on-year threshold for the first time since the pandemic, with June 2026 recording 9.2% growth. This volume of expansion is compensating for what interest margins cannot deliver, representing a fundamental shift in the growth dynamic. Record fee and trading income performance stands out as key earnings drivers. These non-interest revenues more than offset another quarter of declining NII during the second quarter of 2026, with the analyst expecting this trend to continue delivering results through the second half of 2026. CASA deposits demonstrated robust growth of 16% year-on-year, maintaining the CASA ratio at 20.6% of total deposits. This performance is particularly valuable as it keeps funding costs contained despite the challenging interest rate environment. DBS and OCBC have raised their full-year 2026 earnings guidance, signalling management confidence in their business outlook. OCBC specifically increased its loan growth guidance, reinforcing the positive volume of momentum across the sector. The analyst notes that banks' dividend yields remain attractive at 4.0% for FY26e, supported by share buyback programmes and capital return dividends that bolster return on equity. Investment Negatives Net interest margins continue to face pressure, declining 17-22 basis points across the three major banks during the quarter. This margin compression represents an ongoing headwind that volume growth is working to offset rather than eliminate. The Monetary Authority of Singapore's policy tightening on 27 July, which steepened the Singapore dollar NEER appreciation slope to around 1.25% from approximately 1.00%, creates a counteracting force against rising SORA rates. A stronger Singapore dollar works to lower SGD rates, potentially capping the net interest margin recovery rather than reversing the decline. The Monetary Authority of Singapore's policy tightening on 27 July, which steepened the Singapore dollar NEER appreciation slope to around 1.25% from approximately 1.00%, creates a counteracting force against rising SORA rates. A stronger Singapore dollar works to lower SGD rates, potentially capping the net interest margin recovery rather than reversing the decline. UOB reduced its fee growth guidance to low single digits from previously high single digits, indicating some uncertainty around non-interest income sustainability across all institutions. The analyst expects NII to turn positive year-on-year only towards the fourth quarter of 2026, suggesting continued near-term pressure on this core revenue stream. Outlook The research suggests SORA will hold around current levels through the second half of 2026 rather than climb further, limiting the scope for significant margin expansion. However, the combination of strong volume growth and robust non-interest income is expected to support overall earnings momentum. Recommendation & Target Price Phillip Securities Research maintains an ACCUMULATE recommendation on Singapore banks. The firm expresses preference for DBS, citing its fixed dividend per share policy and raised FY26e guidance, and OCBC, highlighting wealth management momentum and remaining capital return potential. No specific target prices are provided in the report. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Soilbuild Construction Maintains Strength Despite Project Delays
Brief Overview Soilbuild Construction Group Ltd delivered mixed 1H26 results with revenue and profit below expectations, primarily due to significant delays in precast project recognition. However, the company demonstrated resilience with 25.8% year-on-year profit growth driven by strong construction segment performance and margin expansion, whilst maintaining its dividend appeal through increased payout ratios. Investment Positives The standout positive for TeleChoice centres on the strong momentum in its PCS division. PCS revenue grew an impressive 25% year-on-year in 1H26 to S$205mn, whilst profit before tax spiked 140% to S$6.1mn. This growth was driven by U Mobile's expansion in mobile subscribers, with handset demand receiving additional support from promotional activities and increased subsidies as more consumers transition from prepaid to postpaid plans. Margin performance proved particularly impressive, with 1H26 net margins expanding by 1.9 percentage points year-on-year to 12.3%. This represents an 8.2 percentage point premium over average local peers' net margins of 4.1%, achieved through operational scale benefits and timely project deliveries. The company's balance sheet strength improved markedly, with 1H26 net cash turning positive to S$138 million compared to 1H25 net debt of S$0.6 million. This transformation was driven by 18% year-on-year higher operating cash flow to S$56.5 million, whilst receivables fell S$30.7 million half-on-half, freeing up working capital. Shareholder returns increased substantially through a higher dividend payout ratio. The proposed interim dividend of 1.6 cents per share represents a 2.2 times year-on-year increase from 0.5 cents per share in 1H25. The 1H26 dividend payout ratio increased by 18 percentage points year-on-year, supported by the stronger balance sheet. Investment Negatives Precast segment performance presented challenges, with revenue declining 59% to S$24.2 million due to project recognition delays. Many precast projects remained in the design phase, creating timing differences that impacted overall revenue achievement. Order book size decreased to S$800 million from S$1.19 billion in 1H25, representing a 32.8% decline following progress on major projects with exceptional scale, reducing visibility for future performance. Outlook Production is expected to ramp up in 2H26 and into 1H27 as precast projects advance beyond the design phase. Higher industrial demand is anticipated as 29% more industrial land is released from the Industrial Government Land Sales programme for 2H26. The company is expected to gradually win more tenders and expand its order book size beyond S$1 billion. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation with an unchanged target price of S$1.20. The valuation multiple was lowered from 9 times to 8.5 times FY27 price-to-earnings ratio to reflect lower visibility from the smaller order book. The company trades at an FY26 dividend yield of approximately 6.2%. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
UltraGreen.ai – One small step for rival, no giant leap
Brief Overview Zydus Lifesciences announced on 4 Aug 26 that it had secured 180-day Competitive Generic Therapy exclusivity from the FDA for a generic ICG dye, introducing the first credible competitor to UltraGreen.ai's US franchise. UltraGreen.ai's share price dropped 30.7% yesterday following this news. Despite this development, Phillip Securities Research believes the FDA approval for Zydus is not an imminent threat to UltraGreen.ai. Investment Positives Several factors support UltraGreen.ai's defensive position against new competition. The company has established significant operational advantages that will be difficult for new entrants to replicate quickly. UltraGreen.ai has spent years building its current capacity of approximately 3 million vials per year, supported by exclusive evergreen API contracts, dedicated lyophilisation capacity and a multi-contract manufacturing organisation network. The company benefits from established market relationships that new competitors must develop from scratch. New entrants need to establish hospital and group purchasing organisation relationships, whilst hospitals have little incentive to switch from a proven supplier. UltraGreen.ai's competitive moat is reinforced by its focused approach and integrated platform. ICG is the company's sole product focus, unlike diversified generics players such as Zydus Lifesciences. The company's position is further strengthened by its camera and software platform, and by a regulatory dossier built over 15 years. Additionally, the 180-day CGT exclusivity that Zydus has secured actually blocks other generic makers from using the Abbreviated New Drug Application pathway to get approval, limiting future competitors from entering the market for that period. UltraGreen.ai will continue to sell ICG vials in the US during this exclusivity period. Investment Negatives The primary concern is aggressive pricing competition from new entrants. There is a risk that Zydus may compete aggressively on price, undercutting the market significantly to gain market share. This potential pricing pressure has led to reductions in earnings forecasts, with FY26e and FY27e PATMI reduced by 3% and 6% respectively to account for this risk. Outlook Whilst competition has emerged, the analyst believes UltraGreen.ai's established infrastructure and market position provide significant defensive advantages. The company's focused approach to ICG, combined with its integrated platform and long-established regulatory dossier, should help maintain its market position despite new competition. Recommendation & Target Price Phillip Securities Research maintains a BUY recommendation for UltraGreen.ai with a lower DCF-based target price of US$1.81, reduced from the previous US$1.91. The company trades at an FY26e P/E of 9.9x. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.
CNMC Gold Maintains Buy Rating Despite Production Headwinds, Target Price Cut to S$2.03
Phillip Securities Research has maintained its BUY recommendation on CNMC whilst cutting its target price to S$2.03 from S$2.34, as higher gold prices help offset declining production volumes from the company's mining operations. Company Overview CNMC operates gold mining activities with fine gold comprising approximately 76% of its total revenue. The company is currently undertaking a significant US$12 million underground mine construction project at New Found and Manson's Lode, targeted for completion by the end of 2027. Strong Financial Performance Despite Volume Challenges The company demonstrated resilient financial performance in the first half of fiscal 2026, with revenue increasing 23.4% year-on-year to US$65.2 million and profit after tax and minority interests rising 17.8% to US$18.6 million. This growth was primarily driven by a substantial 40% increase in fine gold's average selling price to US$4,486 per ounce. Key Positives Supporting Performance Fine gold revenue, which represents the company's largest revenue stream, surged 31% year-on-year to US$49.8 million despite lower production volumes across all metals. The significant price appreciation in precious metals proved crucial, with gold prices rising 40% and silver prices increasing by an impressive 95% year-on-year. This pricing strength successfully offset the negative impact of reduced mining volumes. The underground mine construction project continues to progress according to schedule, with both the hoisting system and surface infrastructure already completed at New Found and Manson's Lode sites. The next phase involves shaft excavation as part of the comprehensive development programme. Operational Challenges and Revised Outlook However, the company faces production headwinds from lower-grade ore extraction through open-pit mining operations. This has prompted Phillip Securities Research to reduce its fiscal 2026 earnings forecast by 18%, reflecting a 7% reduction in the gold average selling price assumption to US$4,500 per ounce and a 16% decline in expected production volume to 23,957 ounces. The mining operations also contend with higher diesel prices and the challenge of spreading fixed costs over lower output levels, which impacts operational efficiency. CNMC currently trades at 11.7 times forward fiscal 2026 price-to-earnings ratio. The valuation methodology excludes terminal value assumptions, with the analysis based on the mining permit's validity through 2034. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. 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Strong Half-Year Performance Underpins Income Visibility United Hampshire US REIT (UHREIT), a defensive real estate investment trust focused on grocery, necessity retail, and self-storage properties in the United States, has delivered a solid first-half performance that reinforces its position as an income-focused investment. The REIT reported net property income of US$25.5 million for 1H26, representing a 6.4% year-on-year increase, whilst distribution per unit grew 3.3% to 2.16 US cents. Phillip Securities Research has reiterated its BUY recommendation with an unchanged dividend discount model-based target price of US$0.69, highlighting the trust's strong income visibility and attractive current trading yield. Operational Excellence Drives Performance The company's performance was bolstered by several key operational achievements and strategic acquisitions. New lease commencements, rental escalations, and contributions from recently acquired properties Dover Marketplace and Wallingford Fair Shopping Centre, purchased in August 2025 and January 2026 respectively, drove the distributable income growth. However, this was partially offset by higher finance costs resulting from additional borrowings used to fund these acquisitions. Strong Fundamentals Support Defensive Appeal UHREIT's defensive characteristics remain firmly intact, with grocery and necessity properties maintaining exceptionally high occupancy at 97.6%, demonstrating the resilient nature of essential retail properties. The self-storage segment showed notable improvement, with occupancy rising 430 basis points to 93.5%, driven by the peak spring leasing season. Average quarterly net rental rates remained healthy across the portfolio, with Millburn Self-Storage showing slight increases whilst Carteret Self-Storage rates remained broadly stable. The trust signed 260,000 square feet of leases during the first half at positive rent reversion, underlining strong tenant demand. A significant competitive advantage lies in UHREIT's limited near-term leasing risk, with only 0.6% and 4.6% of grocery and necessity leases expiring in FY26 and FY27 respectively. Improving Financial Metrics Financial management continues to strengthen, with the all-in cost of debt improving to 4.89% from 5.13% year-on-year and expected to decline further to 4.7% in FY26. The trust maintains 71.5% of debt on fixed rates, providing protection against interest rate volatility. Aggregate leverage improved to 40.4% and is projected to decline to approximately 37% following the divestment of BJ's Quincy. UHREIT currently trades at an attractive FY26 estimated dividend yield of 8.8%, supported by a long weighted average lease expiry of 7.9 years and high tenant retention rate of 90%. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. 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Centurion Corporation Maintains Strong Growth Trajectory with BUY Rating and S$1.94 Target Price
Centurion Corporation Ltd (CCL), a leading provider of purpose-built worker accommodation (PBWA) and student accommodation across Singapore, Malaysia, Australia, and the UK, has demonstrated robust growth momentum in its 1H26 results. The company operates a diversified portfolio of accommodation assets serving both migrant workers and students across multiple markets. Strong Revenue Growth Driven by Strategic Acquisitions CCL's revenue performance has been particularly impressive, with first-half 2026 revenue surging 31% year-on-year to S$184.9 million, marking the company's strongest growth since the first half of 2022. This exceptional performance was primarily driven by a series of strategic acquisitions and asset enhancement initiatives across key markets. The revenue acceleration reflects several major acquisitions that have significantly expanded CCL's capacity. The company acquired an additional 55% stake in the 8,006-bed Westlite Mandai Purpose-Built Workers' Accommodation (PBWA) facility, representing 19% of Singapore's capacity. In Malaysia, CCL acquired the 7,083-bed Harum Megah PBWA, adding 20% to the country's capacity. The Australian market saw the addition of the 732-bed EPIISOD Macquarie Park facility, which boosted Australia's PBSA capacity by 82%. Beyond acquisitions, ongoing asset enhancement initiatives have contributed substantially to growth. These projects added 5,460 beds, representing a 13% increase in Singapore capacity through expansions at Westlite Toh Guan and Westlite Mandai PBWA facilities, which are currently in the occupancy ramp-up phase. Market Dynamics Signal Continued Demand A significant positive development for CCL came through securing a three-year lease extension from JTC for the 1,224-bed Westlite Tuas Avenue 2 quick build dormitory, with options for an additional 3.5-year extension. This extension indicates a shortage of worker dormitories in Singapore, particularly given the progress of major construction projects including Changi Terminal 5, Marina Bay Sands Integrated Resort, healthcare facilities, and Cross Island Line construction. Investment Outlook and Guidance Phillip Securities Research maintains a BUY recommendation with an upgraded target price of S$1.94, increased from the previous S$1.85. The revised valuation incorporates CCL's 7,000-bed Kranji Close PBWA project and improved quick build dormitory valuations. CCL has provided forward revenue guidance of S$190 million for the second half of 2026, representing 22% year-on-year growth, with total beds expected to grow at a 5% compound annual growth rate through 2028. Frequently Asked Questions [market_journal_faq] This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst. Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. 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Frencken Group Ltd, a leading provider of precision engineering and manufacturing services across semiconductor, medical, automotive, and industrial automation sectors, has received an upgraded rating from Phillip Securities Research following its 1H26 results and improved outlook for the remainder of the year. Mixed First Half Performance Sets Stage for Recovery The company's 1H26 revenue and profit after tax and minority interests (PATMI) came in within expectations, representing 47% and 45% of full-year forecasts respectively. PATMI declined 3% year-on-year to S$19.2 million, primarily due to anticipated weakness in semiconductor and analytical life science segments. However, this decline was partially offset by robust performance in medical, industrial automation, and automotive divisions. Key Positive Developments Drive Optimism The medical segment showed particularly strong momentum, with 2Q26 revenue accelerating to 16% year-on-year growth, reaching S$35.8 million compared to just 5% growth in 1Q26. This acceleration was driven by increased orders from Europe for digital pathology equipment, highlighting the company's strong positioning in advanced medical technology manufacturing. Industrial automation also demonstrated resilience, with 2Q26 revenue rebounding 19% year-on-year to S$10.8 million following a 1% decline in 1Q26. This recovery was attributed to higher orders from the company's data storage customer, though management cautioned that 2H26 industrial automation revenue is expected to decline due to changes in customer sourcing arrangements. The automotive segment maintained steady growth momentum, with 1H26 revenue advancing 10% year-on-year to S$32.2 million. This performance was underpinned by increased production of radar antennas. Notably, Frencken's European automotive customer is transitioning from pilot production in Sweden to high-volume production in China, with management guiding a production ramp that will increase volumes quarter-by-quarter over the next two years. Second Half Recovery Expected Phillip Securities Research anticipates 2H26 growth in Frencken's semiconductor, automotive, and medical segments will offset the projected decline in industrial automation. The semiconductor outlook appears particularly promising, with DUV and metrology demand expected to surge for the company's Netherlands front-end semiconductor customer in 2H26. Additionally, some demand pull-in is anticipated from automotive customers. Based on these developments, Phillip Securities Research upgraded Frencken Group to BUY from ACCUMULATE whilst maintaining the target price at S$3.30, representing a valuation of 29x FY27 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. 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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