Phillip Securities Research: Monday Morning Call – Key Market Updates and Investment Insights – 28 Sep 2026 October 9, 2026

Event: Phillip Securities Research Monday Morning Call

Executive Summary

Phillip Securities Research conducted their weekly Monday Morning Call, covering key market developments including a new Snowflake initiation, VinFast site visit findings, SPL Lifestyle credit update, and comprehensive technical analysis of major indices. The session provided insights into AI-driven data platforms, electric vehicle manufacturing, and current market conditions amid rising interest rates.

Snowflake Initiation: Riding the AI Data Wave

Target Price: US$423 (26% upside potential)
Rating: Buy

Company Overview

Snowflake operates as a leading AI data cloud platform, helping enterprises transition from traditional on-premise infrastructure to scalable, cloud-native solutions. The company serves large-scale customers managing hundreds of petabytes of data across various industries.

Key Investment Thesis

1. Rising Data Volumes: The shift to cloud storage is accelerating as businesses digitise operations and adopt AI technologies
2. AI Product Momentum: Snowflake Cortex and Snowflake Copilot are driving significant adoption, contributing roughly half of recent quarter growth acceleration
3. Consumption-Based Model: Unlike traditional SaaS companies, 95% of Snowflake’s revenue comes from usage-based billing, directly benefiting from increased AI adoption

Financial Highlights

Revenue Growth: 35% year-over-year in recent quarter (strongest in 3 years)
Customer Growth: 32% increase in new customers year-over-year
Gross Margin: Maintained at 68% despite aggressive computing investments
Cash Position: Strong balance sheet with US$4.3 billion in cash and investments

Risk Factors

Competition from hyperscalers (AWS Redshift, Microsoft Fabric, Google BigQuery)
Consumption model sensitivity to economic conditions
Potential AI spending normalisation in the long term

VinFast Auto: Site Visit Insights

Key Findings from Factory and Dealership Visits

Domestic Dominance vs. International Challenges

VinFast maintains strong market position in Vietnam due to comprehensive ecosystem advantages, including charging infrastructure, dealer networks, and taxi fleet integration. However, overseas expansion faces significant headwinds from established Chinese competitors like BYD.

Manufacturing Capabilities

Car Production: Highly automated facilities comparable to scaled-down BYD operations
Scooter Manufacturing: Manual assembly process for millions of units annually
Robotaxi Development: Early-stage autonomous vehicle programme using hybrid camera-LiDAR approach

Market Dynamics

Positive Factors:

Strong domestic brand loyalty and patriotic consumer preference
Rising fuel prices driving EV adoption
Comprehensive charging infrastructure

Challenges:

Scale disadvantage: 23 times smaller than BYD (4.6 million vs 200 thousand units)
High financing costs: 10% first-year interest rates, 15-18% floating rates
Limited international competitiveness outside Vietnam

SPL Lifestyle: Credit Profile Update

Following 5-Year Bond Issuance

Business Segments

1. Jewelry & Luxury Retail: Poh Heng, Goldheart, Maxi Cash brands
2. Pawn Broking: Operations in Singapore and Malaysia
3. Secured Lending: Property-backed lending in Australia via BigFundr platform

Credit Improvements

EBITDA Growth: 45% increase to US$106 million, driven by retail margin expansion
Interest Coverage: Improved from 4.3x to 6.5x
Leverage Reduction: Debt-to-tangible equity declined from 3.1x to 2.2x

Key Considerations

Liquidity Concern: US$83 million cash vs. US$567 million short-term borrowings
Gold Price Sensitivity: Inventory positioned 30-40% below prevailing gold prices
Refinancing Requirements: Significant short-term borrowing rollover needed

Technical Analysis: Market Outlook

S&P 500

Recent Performance: Up 1.2% last week
Technical Setup: Breakout from August wedge consolidation
Support Levels: 7,655-7,700 (trend line and 20 SMA)
Resistance: 7,780-7,820 (upper Bollinger Band to previous high)

STI Index

Performance: Down 5.4% month-to-date
Technical Indicators: Oversold RSI at 27.5, overextended ADX above 40
Support: 956-972 area
Resistance: 985-995 region

Fed Rate Hike Analysis

Historical data shows equity markets generally remain resilient during rate hike cycles:

Initial 3-month period typically sees modest drawdowns (avg. -1.1%)
12-month performance averages +4.1% following rate hike initiation
Gradual hiking cycles outperform aggressive ones by 9.3% over 12 months

Singapore Market Weekly Update

Population Growth

Current trajectory tracking slightly below 2013 White Paper projections
Average annual increase of 100,000 over past three years (vs. 30,000 pre-pandemic)
Supporting domestic consumption sectors

Interest Rate Environment

October rate hike probability increased to 70% (from 50%)
Singapore banks positioned differently from US counterparts due to rate cycle timing
REITs expected to remain under pressure in near term

Frequently Asked Questions

Q: Why did US banks react negatively to higher interest rates while Singapore banks performed better?

A: The key difference lies in where each market sits in the rate cycle. US rates are already at elevated levels (near 5%), so further hikes risk reducing loan demand and increasing credit losses. Singapore banks benefit from rate increases coming off a much lower base (around 1%), with healthy loan growth and fee income from fund inflows.

Q: What's the significance of SpaceX's Starship IFT-6 launch?

A: This marks the first revenue-earning flight carrying 30 Starlink V3 satellites with higher capacity and orbital positioning. While positive for the space business, it doesn't change the sell rating on Tesla due to ongoing AI compute business losses.

Q: How will higher bond yields affect the AI economy?

A: Large tech companies (Mag 7) can absorb higher financing costs, but smaller AI labs and cloud providers heavily dependent on borrowing will face significant challenges. This could lead to market consolidation favouring established players.

Q: What are the key risks for Snowflake's growth story?

A: Main risks include intensifying competition from hyperscalers' native data platforms, sensitivity of the consumption model to economic downturns, and potential normalisation of AI spending as enterprises find efficiency gains.

Q: How does the Trump-Xi meeting impact tech stocks?

A: The meeting resulted in a trade truce extension until 10 Jan, reducing near-term escalation risks. China requested fewer restrictions on advanced AI chips, potentially benefiting NVIDIA, though no major deals were announced.

Q: What's driving the cybersecurity stock rally despite AI breaches?

A: Rather than indicating failure, AI-related security incidents are driving demand for more advanced cybersecurity solutions. It's analogous to upgrading home security after a break-in rather than abandoning security altogether.

Q: Is it time to buy bonds given higher yields?

A: Using current inflation rates (3.3%) plus historical real yield and term premiums, fair value for 10-year bonds would be around 5.8%, suggesting current levels around 5.17% may still have room to rise. However, timing depends heavily on inflation trajectory expectations.

Q: How will VinFast's expansion outside Vietnam perform?

A: International expansion faces significant challenges due to scale disadvantages versus established players like BYD. The 23x smaller production scale limits cost competitiveness, making overseas growth likely to remain slow.

Q: What catalysts could drive SPL Lifestyle's credit profile?

A: Key positive factors include continued gold price strength benefiting retail margins, successful refinancing of short-term debt, and expansion of the secured lending platform. The main risk remains liquidity management given the significant borrowing rollover requirements.

*Disclaimer: This information is for educational purposes only and should not be considered as investment advice. Please consult with qualified financial professionals before making investment decisions. *

This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.

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