Boustead Singapore - CGS-CIMB Research 2022-06-08: Look Forward To A Better FY23

Boustead Singapore - Look Forward To A Better FY23

  • Boustead Singapore (SGX:F9D) reported a FY22 (Apr 2021 to Mar 2022) core net profit of S$32.3m (-28% y-o-y), below expectations at 89% of our forecast. The weaker performance in FY22 was mainly due to a drop in revenue across key segments, as the pandemic and volatile macro environment resulted in weaker order backlog. Despite weaker profitability, Boustead Singapore's FY22 full-year dividend of S$0.04 represents a healthy 4.2% dividend yield.
  • With structural tailwinds intact (smart-city trend, push for ESG initiatives), we expect Boustead Singapore's Geospatial segment to resume a high single-digit growth rate from FY23F onwards.
  • We believe FY23F will be a more promising year for Boustead Singapore’s engineering segment, with potentially more final investment decisions by the global energy sector aiding orderbook replenishment.
  • Reiterate ADD call on Boustead Singapore. We lowered our FY23-24F earnings per share forecast due to weaker order wins in FY22. Our target price for Boustead Singapore is lowered to S$1.30 accordingly, still based on a 20% discount to its SOP-based valuation.
  • Boustead Singapore's valuation remains attractive — stripping out its stake in Boustead Project (SGX:AVM) (S$150m based on market value) and net cash of S$185m, investors are essentially paying ~4x CY23F P/E for the geospatial segment (which is a high-margin, cash generating business that offers structural growth), while getting the energy and healthcare segments for free.

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 1.30 DOWN 1.400

Previous report by CGS-CIMB:
2021-05-28 Boustead Singapore - A Record Year

Relevant links:
Boustead Analyst Report,
Boustead Target Price,

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


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