Boustead Projects - CGS-CIMB Research 2022-06-08: Charting Next Leg Of Growth

Boustead Projects - Charting Next Leg Of Growth

  • Boustead Project (SGX:AVM)’s FY22 core net profit of S$11.3m (FY21: S$3.1m loss) came in slightly above expectations at 109% of our forecast. While Engineering and Construction (E&C) segment saw margins negatively impacted by higher cost pressures (especially for pre-pandemic backlog), this was offset by higher profits in the real estate segment due to
    1. higher occupancy of asset portfolio which led to stronger recurring income, and
    2. capital recycling initiative with the sale of 351 on Braddell to Boustead Industrial Fund (BIF).
  • While Boustead Project has observed an improvement in construction demand for the private sector, it has been erring on the side of caution when it comes to project tendering in view of escalating cost pressures, including labour, construction material and supply chain costs.
  • With its strong net cash of S$203m (end-FY22), Boustead Project looks to grow further in Vietnam. It has inked strategic collaboration with a local partner, Khai Toan Joint Stock Company, to acquire a 60% stake in an industrial real estate fund (to be jointly set up with initial injection of 6 assets worth US$84m). Locally, Boustead Project intends to ramp up industrial property development efforts when there is more visibility on the current inflationary cycle and its cost impacts.
  • Reiterate ADD. Boustead Project remains attractively valued, with net cash of S$0.65/share as of end-FY22 (72% of market cap), while owning a portfolio of industrial properties worth ~S$500m (mostly JV arrangements where Boustead Project holds ~50% stakes) that can be potentially injected into BIF or other property trusts to further unlock value in future years.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

ONG Khang Chuen CFA CGS-CIMB Research | 2022-06-08
SGX Stock Analyst Report ADD MAINTAIN ADD 1.25 DOWN 1.400

Previous report by CGS-CIMB:
2021-11-15 Boustead Projects - Recovering From COVID-19 Depths

Relevant links:
Boustead Project Analyst Report,
Boustead Project Target Price,

Boustead Project Share Price History,
Boustead Project Announcements,
Boustead Project Dividends/ Corp Actions,
Boustead Project News Articles


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