BRC Asia - Riding On Industry Tailwinds
- BRC Asia (SGX:BEC)’s 1H22 net profit of S$39.8m (+108% y-o-y) was a strong beat, helped by continued recovery of construction activities in Singapore.
- We remain confident of further recovery in coming quarters as the labour shortage eases, given steady construction demand and work backlog.
- In our panel discussion with building material players last week, we understand that while higher commodity, freight and energy costs have led to higher input costs for building material players year-to-date, they have generally been able to pass on the higher costs. We believe BRC Asia’s strong market share position also provides it with stronger procurement power to navigate current pricing volatility in the steel market and uphold margins.
- Reiterate ADD on BRC Asia with a higher target price of S$2.50. BRC Asia is our sector top pick for its relatively attractive valuation and higher dividend yield.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
ONG Khang Chuen CFA CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | https://www.cgs-cimb.com 2022-05-12 2022-05-12
Previous report by CGS-CIMB:
2022-02-09 BRC Asia - A Strong Start To FY22
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