Demat account
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Demat account
Moving from physical certificates to electronic recordkeeping is dematerialisation (demat). Some trading institutions require demat accounts because they are the most accurate type of record keeping. Dematerialisation was intended to boost the speed and security of financial transactions, and bookkeeping for financial institutions is now an accepted practice. Investors can benefit from demat accounts in several ways, including improved transaction security, faster trade processing, and less administrative burden.
What is a demat account?
An account designed to house equities in a dematerialised form is known as a demat account or a dematerialised account. Dematerialisation is the process of transferring physical shares to an electronic format. A demat account is used for all electronic trade settlements. A demat account records all debit and credit transactions on your investments, just like a bank account lists your transactions in a passbook.
Demat accounts are zero-balance accounts. Therefore you don’t need any shares to open one. Applicants do not need to be shareholders to open a demat account. Certificates for financial assets like shares, bonds, government securities, mutual funds, etc., can be kept in demat accounts.
Understanding a demat account
A demat account keeps securities like stocks, bonds, and mutual funds, making buying, selling, and managing investments simpler, quicker, and more convenient. You can monitor and track your portfolio online with a demat account, and you won’t have to be concerned about losing or ruining hardcopy certificates. Since the electronic process is quicker than the conventional trading technique with physical certificates, demat accounts benefit investors who wish to take advantage of possibilities to buy and sell rapidly.
The operation of a demat account is similar to that of a savings account. You can order using your online trading account once it is open. You must keep in mind to link your trading and demat accounts. The exchange processes the order that is placed. Your account is credited with the acquired shares after the availability of the claims has been confirmed. You must include a delivery instruction letter and stock information to sell shares. The stakes are taken from your demat account, and you can sell them further by having your trading account credited with an equal amount.
Types of demat account
Two types of demat accounts are available in the USA: individual demat accounts and joint demat accounts.
- Individual demat account
It is a type of account that a single person can open. This account is ideal for individuals who want to invest in the stock market and manage their investments. In this type of account, the investor is the sole owner and can handle the account at their convenience. The investor can buy and sell securities, stocks, and other financial instruments using this account.
- The joint demat account
It is another type of account that two or more individuals can open. This account is ideal for family members, partners, or friends who want to invest in the stock market together. All account holders have equal rights and responsibilities in this type of account. They can manage the account jointly and take investment decisions together.
- Corporate demat account
Apart from these two types of demat accounts, there is also a corporate demat account. This type of account is specifically designed for companies and organisations that want to hold shares and securities in a digital format. This account allows companies to manage their investments more efficiently and in a more organised manner. The corporate demat account can be opened by any registered company or organisation.
How to get Demat Account
The following is the process of getting a demat account:
- First, choose the location where the demat account is to be opened. Next, decide which DP you want to open the demat account. Numerous financial institutions and brokerages provide this service.
- Complete the account opening form, attach copies of all required documentation, and provide a passport-size photo.
- Original documents should be on hand for verification.
- A copy of the terms and conditions agreement is given to you. Read it through.
- A representative of DP will get in touch with you and confirm the information you provided.
- Upon successful processing, you will receive a client ID and a demat account number, which you may use to access the account online.
- You must pay some account opening fees, such as the monthly transaction cost and the annual maintenance fee. The cost varies from one depository participant to another. A percentage of the overall transaction value is what some DPs charge, while others charge a flat price for each transaction. The conversion of shares from physical to electronic or vice versa is another service that DPs charge for.
- The minimal quantity of securities required to keep your account open is unrestricted.
Benefits of demat account
There are numerous benefits for investors who use a demat account to purchase mutual funds. One key advantage is that it is a simpler and safer way to store assets than the former system, which relied on physical certificates. Paper certificates are prone to theft, loss, and damage. To trick investors, criminals can make fictitious certificates.
Investors benefit from automatic and quick updating of their accounts using electronic bookkeeping. Mutual funds can speed up trade processing, eliminate excess paperwork, and lessen errors brought on by human error.
Frequently Asked Questions
Demat accounts are designed to transform share certificates from a physical to an electronic format, increasing account holders’ accessibility.
Your demat account is linked to your trading account. Your bank account is subsequently connected to this. To begin trading, you must transfer money from your bank account to your trading account. You can use your trading account to order shares once you have added funds.
Claims are transferred to your account after the T+2 days following your purchase’s completion. “T” stands for the day your order was processed. Trading and demat funds are integrated, so these procedures go swiftly and smoothly. You can also sell a share directly by putting a sell order to the stock market through your trading account.
You can have a demat account whether you’re an adult or a minor. If you are under 18, your parents or a designated guardian may open and manage your demat account upon completing the required paperwork.
By eliminating the inconveniences of physically managing and maintaining paper shares and accompanying documentation, a demat account streamlines the process of owning investments, including shares, bonds, government securities, mutual funds, insurance, and ETFs.
Physical securities, such as share certificates and other papers, can be converted electronically and stored in a demat account through dematerialisation.
Related Terms
- Option Adjusted Spread (OAS)
- Beta Risk
- Bear Spread
- Execution Risk
- Exchange-Traded Notes
- Dark Pools
- Firm Order
- Covered Straddle
- Chart Patterns
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- After-Hours Trading
- Speculative Trading
- Average Daily Trading Volume (ADTV)
- Swing trading
- Sector-Specific Basket
- Option Adjusted Spread (OAS)
- Beta Risk
- Bear Spread
- Execution Risk
- Exchange-Traded Notes
- Dark Pools
- Firm Order
- Covered Straddle
- Chart Patterns
- Candlestick Chart
- After-Hours Trading
- Speculative Trading
- Average Daily Trading Volume (ADTV)
- Swing trading
- Sector-Specific Basket
- Regional Basket
- Listing standards
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- Interest rates
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- Performance appraisal
- Anaume pattern
- Commodities trading
- Interest rate risk
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- Adverse Excursion
- Booked Orders
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A-Sonic Aerospace Scales Up Operations with Strategic JGL Group Acquisition for Enhanced Growth
Company Overview A-Sonic Aerospace Ltd is a logistics company that has been expanding its multi-modal freight forwarding operations. Following its latest acquisition, the enlarged group now operates across 16 countries and 34 cities, positioning itself as a significant player in the regional logistics sector. Major Acquisition Details A-Sonic Aerospace has announced the acquisition of a 60% stake in JGL Group for a total cash consideration of S$15.216 million. The transaction structure includes S$6 million for 23.56% of new shares in JGL and S$9.216 million for 36.34% vendor shares. JGL Group brings over 30 years of operating history and specialises in multi-modal freight forwarding across ocean, air and land transportation, alongside paper trading activities and an upcoming ISO-tank cleaning and maintenance facility. JGL's business model demonstrates strong diversification, with ocean freight forwarding accounting for 77% of revenue, followed by paper trading at 12%. The company maintains a substantial presence across six ASEAN countries, with Singapore representing 48% of revenue, Vietnam 17%, Indonesia 11%, Cambodia 9%, Thailand 9%, and Malaysia 6%. For FY25, JGL recorded revenue of US$63.7 million and PATMI of US$1.82 million. Financial Impact and Growth Drivers The acquisition represents compelling value, with the logistics and paper trading business acquired at an implied valuation of S$48.4 million, translating to a 7.73x P/E ratio excluding the Isotank operations. The transaction is expected to deliver significant financial benefits, increasing A-Sonic's FY25 revenue and PATMI by 28% and 36% respectively on a pro forma basis. Earnings per share will rise substantially by 36% to S$0.0511. Multiple growth drivers emerge from this strategic combination. The increased operating scale and container volume creates opportunities for significant cost synergies, particularly in sea freight expenses. The expansion of the agent network enables reduced agent commissions through improved coverage of receiving agents. Additionally, enhanced working capital availability for JGL operations should drive increased customer revenue. The ISO tank depot, scheduled for operational commencement in FY27, will contribute maiden earnings to the group. The acquisition is expected to complete on 1 October 2026, subject to an Extraordinary General Meeting approval. Notably, A-Sonic continues trading below its net tangible assets value of S$0.6245, suggesting potential undervaluation despite the enhanced growth prospects from this strategic expansion. 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.
Lendlease REIT Sustains Retail Momentum with AEI Potential, Upgraded to S$0.77 Target
Phillip Securities Research has maintained its BUY recommendation on Lendlease Global Commercial REIT (LREIT) whilst raising the target price to S$0.77 from S$0.73, following strong retail performance and improved capital management metrics. Company Overview Lendlease Global Commercial REIT operates a portfolio of retail and office properties, with its Singapore retail assets serving as key performance drivers. The REIT has recently expanded its retail footprint through the acquisition of PLQ Mall, positioning itself to benefit from suburban retail demand resilience. Strong Operational Performance Drives Growth The REIT delivered solid 2H26 results, with distribution per unit meeting 50% of expectations and rising 2.7% year-on-year. Gross rental income and net property income increased 6.8% and 6.6% respectively to S$110.0 million and S$78.7 million. This growth was underpinned by full-period contribution from PLQ Mall following its acquisition and exceptional retail performance metrics. Retail rental reversions strengthened to 11.7% from the previous year's 10.2%, whilst committed occupancy remained robust at 98.5%. Tenant sales surged 24.0% year-on-year, with cumulative visitation up 16.4%, demonstrating the strength of suburban retail demand. F&B, sports, and jewellery/watches tenants delivered particularly strong performance, though gifts and ancillary-use segments lagged. Management is executing strategic asset enhancement initiatives at PLQ Mall, reconfiguring approximately 16,000 square feet across Levels 1 and 2. The former H&M, Uniqlo, and Foot Locker spaces are being transformed into 3-5 new tenancies, including two anchor F&B concepts in advanced discussions. This initiative targets high-teens rental reversion upon completion by December 2026. Enhanced Capital Structure The REIT significantly improved its financial position, reducing gearing from 42.6% to 38.9% through strategic capital management. The PLQ acquisition was partially equity-funded via S$280 million private placement and S$196.6 million preferential offering, whilst proceeds from the S$462 million JEM Office sale supported debt repayment. Perpetual securities refinancing proved successful, with S$120 million of S$200 million maturing perpetuals refinanced at 4.28% versus the previous 4.2% rate. The remaining S$80 million was funded through cheaper bank debt. Cost of debt improved to 2.75%, down 71 basis points year-on-year and below management's 2.9% guidance. 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.
SpaceX Faces Financial Headwinds Despite Connectivity Boom, SELL Recommendation at US$75 Target
Phillip Securities Research has initiated coverage of Space Exploration Technologies Corp. (SpaceX) with a SELL recommendation and a DCF-derived target price of US$75.00, based on a WACC of 10.0% and terminal growth rate of 3.5%. The research highlights significant concerns about the company's financial trajectory despite its market-leading positions in space launch and satellite connectivity. Company Overview and Business Performance SpaceX operates as a diversified space technology company with two primary revenue streams: its dominant launch franchise and rapidly expanding satellite broadband business through Starlink. The company's connectivity division has emerged as the clear profit engine, generating substantial growth with revenue climbing 50% to US$11.4 billion and achieving an impressive 39% segment operating margin. However, launch services now represent only 22% of FY25 revenue, indicating the company's strategic shift towards connectivity services. Financial Challenges and Cash Flow Concerns Despite strong growth in connectivity, SpaceX faces substantial financial headwinds. The company recorded an operating loss of US$2.6 billion and net loss of US$4.9 billion in FY25, accompanied by negative free cash flow of US$14 billion. Phillip Securities forecasts that SpaceX will continue generating negative free cash flows through at least FY30, with cumulative outflows expected to reach approximately US$90 billion over this period. AI Ambitions Face Uncertainty The company's artificial intelligence initiatives, whilst positioned as a growth story, present mixed prospects. AI revenue reached only US$3.2 billion in FY25 against a segment operating loss of US$6.4 billion. Critically, the AI business relies heavily on compute contracts that are set to expire by the end of 2029, creating uncertainty about future revenue sustainability. Phillip Securities projects group revenue will peak at US$58 billion in FY28 before declining. Investment Outlook The research presents a cautious view of SpaceX's investment prospects, with the SELL recommendation reflecting concerns about the company's path to profitability despite its technological achievements and market positions. The significant capital requirements and extended timeline to positive cash flow generation appear to weigh heavily on the investment thesis, even as the connectivity business demonstrates strong operational performance. 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.
SIA Demonstrates Resilience Despite Fuel Cost Surge, Phillip Securities Raises Target to S$7.35
Company Overview Singapore Airlines (SIA) operates as a leading international carrier, providing passenger and cargo services globally. The airline has positioned itself as a premium operator in the competitive aviation sector, leveraging its strategic location and service quality to capture market share. Strong Revenue Growth Amid Operational Challenges Phillip Securities Research maintains a NEUTRAL recommendation on Singapore Airlines whilst raising the target price to S$7.35 from S$6.43, following the company's mixed first quarter performance for fiscal year 2027. SIA delivered impressive revenue growth of 19.3% year-on-year to S$5,714 million, representing 27% of full-year estimates and exceeding expectations. However, the airline reported a net loss of S$76 million compared to a profit of S$186 million in the previous year, primarily due to substantial fuel cost increases and associate losses. Record Revenue Performance Drives Positives The airline achieved record revenue performance across both passenger and cargo segments. Passenger revenue surged 18.6% to S$4,582 million, supported by carrying 10.9 million passengers, a 6.3% increase year-on-year, whilst passenger yields rose 12.0% to 11.2 cents per passenger kilometre. The cargo division demonstrated even stronger growth, with revenue jumping 33.5% to S$708 million. Cargo load factor improved 1.9 percentage points to 58.8%, driven by semiconductor and data-centre-related demand, whilst cargo yields increased substantially by 28.1%. Management highlighted that SIA successfully captured spillover passenger and cargo traffic as Middle Eastern carriers reduced capacity due to regional conflicts. However, this competitive advantage is expected to diminish in the second quarter as competing capacity is progressively restored, likely moderating future yield gains. SIA's balance sheet remains robust with a modest net debt position of S$264 million. Total debt increased marginally from S$10,644.7 million to S$10,743.9 million, including a new S$285 million offshore bond issuance largely offset by other debt repayments. The group maintains access to S$3.24 billion of undrawn committed credit lines, providing substantial financial flexibility. Fuel Cost Pressures Present Primary Challenge The primary headwind facing SIA is the dramatic surge in fuel costs. Net fuel costs jumped 78.5% to S$2,253 million as gross fuel costs more than doubled due to elevated jet fuel prices following Middle East conflicts. Management indicated fuel expenses have risen from approximately 28% to 40% of group expenditure this quarter. This increase was partially mitigated by a S$436 million favourable hedging gain, with 46% of first quarter fuel needs hedged through the company's programmatic hedging strategy. 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 Sheng Siong Group Ltd operates as a leading supermarket chain, focusing on fresh products and frozen meals whilst expanding its store footprint across its markets. The company has demonstrated consistent operational improvements, particularly in gross margin expansion over more than a decade. Financial Performance Analysis Sheng Siong delivered solid first-half results for FY26, with revenue and profit after tax and minority interests (PATMI) reaching 50% and 48% respectively of full-year forecasts. The company's second quarter performance was particularly impressive, with PATMI rising 11% year-on-year to S$38 million. This growth was underpinned by record gross margins of 32.8% and strategic store expansion. The company's margin expansion story continues to impress investors, with FY26 expected to mark the 14th consecutive year of rising gross margins. This sustained improvement reflects the company's strategic shift towards higher-margin fresh products, supported by robust demand in frozen product categories. The competitive landscape appears to have stabilised, with more rational pricing strategies across the sector. Key Operational Strengths Phillip Securities Research identified several positive factors driving Sheng Siong's performance. The jump in gross margins represents a standout achievement, with quarterly gross margins reaching a record 32.8% in the second quarter. This improvement stems from increased contributions from fresh products, which require specialised equipment to extend shelf life, alongside growth in frozen meals and meat segments. Store expansion continues to drive revenue growth, with the company increasing its store footprint by 9.5% year-on-year to 772,600 square feet across four additional stores, despite closing one location at Elias Mall in April. Notably, revenue per square foot remained relatively stable at S$1,100, demonstrating consistent productivity across the expanded network. Remarkably, Phillip Securities Research noted no significant negative factors in their analysis, highlighting the company's strong operational execution. Investment Outlook and Recommendation Despite strong operational performance, Phillip Securities Research downgraded their recommendation from Accumulate to Neutral, citing valuation concerns. The target price was raised to S$3.31 from S$3.16, incorporating peak pandemic valuations and rolling forward to 28x price-earnings multiples for FY27. Several headwinds are anticipated, including slower 5% net store growth due to closures, rising operating costs from utility renegotiations, and reduced free cash flow as the company begins capital expenditure on its S$520 million Sungei Kadut distribution centre project spanning 2026-2030. 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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Steady Performance Amidst Portfolio Transformation CapitaLand Ascott Trust, a leading hospitality real estate investment trust, delivered a resilient performance in the first half of FY26 despite facing operational challenges from its ongoing portfolio enhancement initiatives. The trust operates a diversified portfolio of serviced residences and hotels across key global markets, positioning itself as a premier hospitality accommodation provider. Financial Performance Shows Stability The trust reported a 1H26 distribution per unit (DPU) of 2.53 cents, remaining stable year-on-year and aligning with analyst estimates. This result represented 41% of the full-year forecast, with management expecting seasonally stronger performance in the second half. However, core DPU declined 10% year-on-year to 2.16 cents, primarily attributed to timing differences between acquisitions and divestments, income losses from properties undergoing asset enhancement initiatives (AEIs), foreign exchange fluctuations, and one-off tax adjustments. On a same-store basis, distributable income decreased 1% year-on-year. Operational Metrics Reflect Mixed Trends Revenue per available unit (RevPAU) for the second quarter declined 2% year-on-year to S$156, largely due to downtime from properties undergoing enhancement works in key markets. However, on a same-store basis, RevPAU demonstrated resilience with a 1% year-on-year increase, supported by improved operational efficiency and a notable 1 percentage point improvement in portfolio occupancy to 79%. Future Growth Catalysts Phillip Securities Research maintains a BUY recommendation with an unchanged dividend discount model-based target price of S$1.08. The research house maintains its FY26 DPU forecast of 6.1 cents, incorporating S$26 million in distribution top-ups to offset income losses from The Cavendish London AEI project. The firm expects low single-digit portfolio RevPAU growth driven by resilient room rates and higher occupancy levels. Completed enhancement initiatives are expected to support long-term portfolio growth, with higher contributions anticipated from stabilised acquisitions. Notably, The Cavendish London post-AEI and Somerset Clarke Quay are projected to contribute a combined 0.16 cents to FY27 DPU, increasing to 0.21 cents in FY28 and 0.50 cents in FY29. At current levels, the shares offer an attractive FY26 dividend yield of 6.7%. 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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Apple Inc. operates as a technology company that designs, develops, and sells consumer electronics, computer software, and online services. The company's flagship products include the iPhone smartphone and MacBook computer lines, which continue to represent significant revenue drivers for the business. Strong Performance Amid Supply Challenges Apple delivered solid third-quarter results for fiscal year 2026, with both revenue and profit after tax and minority interests (PATMI) meeting analyst expectations. The company achieved impressive 17% year-on-year revenue growth, driven by robust performance across key product categories. iPhone sales surged 22% compared with the previous year, whilst MacBook revenue expanded by an even stronger 29% year-on-year. For the nine-month period, Apple's revenue and PATMI reached 77% and 80% respectively of full-year forecasts, indicating the company remains on track to meet annual projections. The strong performance reflects continued consumer appetite for Apple's premium products across multiple segments. Demand Outpacing Supply Capacity Despite the positive financial results, Apple faces significant operational challenges that are constraining its growth potential. Management highlighted that demand for both iPhone 17 and MacBook products continues to exceed the company's ability to supply them, creating a bottleneck that limits revenue opportunities. Looking ahead to the fourth quarter of fiscal 2026, Apple provided revenue growth guidance of 9 to 11% year-on-year. However, this projection reflects the impact of ongoing supply constraints that prevent the company from fully capitalising on strong consumer demand. Additionally, foreign exchange headwinds are expected to create further pressure on revenue growth during the period. Rising Cost Pressures Memory prices represent a growing concern for Apple's profitability outlook. The continued increase in memory costs poses a meaningful headwind that could compress margins going forward. This cost inflation occurs at a challenging time when the company is already grappling with supply chain limitations. Research Recommendation Phillip Securities Research has downgraded Apple from NEUTRAL to REDUCE, maintaining a DCF target price of US$290. The research firm kept its fiscal year 2026 revenue and PATMI assumptions unchanged, applying a weighted average cost of capital of 6.3% and terminal growth rate of 3.5%. The downgrade reflects concerns about supply constraints, rising memory costs, and AI regulations weighing on near-term performance. Notably, there remains no clear evidence that Apple Intelligence is meaningfully driving product upgrades among consumers. 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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Amazon Strengthens Position as AWS Growth Validates Heavy AI Investment Strategy
Amazon.com Inc., the global e-commerce and cloud computing giant, has demonstrated robust performance, with its Amazon Web Services (AWS) division leading growth acceleration whilst the company maintains significant capital expenditure commitments to artificial intelligence infrastructure development. Strong Financial Performance Driven by Strategic Timing Amazon delivered impressive second-quarter 2026 results, with both revenue and Adjusted PATMI outperforming expectations. The company benefited from a strategic shift in Prime Day timing from its traditional third-quarter slot into the second quarter, which effectively pulled forward retail sales and contributed to stronger-than-anticipated performance. This timing adjustment, combined with robust AWS growth, propelled first-half 2026 revenue and adjusted PATMI to 48% and 45% of full-year forecasts, respectively. AWS Maintains Exceptional Growth Trajectory The standout performer remains AWS, which achieved remarkable 37% year-on-year growth, marking the fifth consecutive quarter of acceleration and representing the fastest growth rate in 18 quarters. This exceptional performance is underpinned by a substantial backlog increase of 154% year-on-year, indicating strong future revenue visibility and customer demand for cloud services. Increased Capital Investment Reflects AI Commitment Amazon has revised its fiscal year 2026 capital expenditure guidance upward to US$220 billion from the previous estimate of US$200 billion , primarily attributed to elevated memory prices. This substantial investment reflects the company's commitment to maintaining its competitive position in artificial intelligence infrastructure, positioning Amazon as a comprehensive AI solutions provider through its model-agnostic approach and full-stack capabilities. Strategic AI Positioning The company's AI strategy leverages custom chip development and strategic partnerships with large language model providers, creating a differentiated offering in the competitive AI landscape. This comprehensive approach allows Amazon to serve diverse customer requirements whilst maintaining technological independence. Investment Recommendation Phillip Securities Research maintains an ACCUMULATE recommendation with an increased target price of US$320, revised upward from US$280. The firm has raised fiscal year 2026 revenue estimates by 2% and adjusted PATMI forecasts by 5% to reflect AWS's faster-than-expected growth trajectory. Capital expenditure estimates were increased by 10% to account for Amazon's intensified AI investments. 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. 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