BRC Asia - CGS-CIMB Research 2022-08-04: Another Strong Set Of Results In 3QFY22

BRC Asia - Another Strong Set Of Results In 3QFY22

  • BRC Asia (SGX:BEC)’s net profit rose to S$20.4m (double y-o-y) in 3Q22 (1 Apr 2022 to 30 Jun 2022), bringing 9M22 net profit to S$60.2m (+105% y-o-y), coming in above expectations at 86% of our full-year forecast.
  • Revenue climbed 52% y-o-y to S$515m in 3Q22 on the back of higher deliveries and higher steel prices (+40% y-o-y). Meanwhile, net margins also expanded 1.0% pt y-o-y to 4.0%, which we believe signals BRC Asia (SGX:BEC)’s capability to pass on some of the higher costs.
  • Construction output in Singapore saw further recovery in 2QCY22, though transient issues arose from
    1. increased workplace incidents (and lower productivity) given time needed to train the newly replenished workforce, and
    2. increased number of stop-work orders at construction sites due to increased dengue and COVID-19 cases reported.
  • Nevertheless, we view these as transient issues which should be alleviated in the upcoming quarters. We continue to expect further recovery in construction activities in 2HCY22.
  • We reiterate our ADD call as we see continued tailwinds for BRC Asia as construction activities recover further. We raise our FY22-24F earnings per share (EPS) forecast for BRC Asia by 8.0-8.7% on the back of higher deliveries and margin assumptions. Our target price for BRC Asia remains at S$2.50, now based on a lower 1.74x CY22F P/BV (previously 1.79x CY22F P/BV), due to higher risk-free rate assumptions.
  • We view the current valuation as attractive, as BRC Asia is only trading at ~6x FY23F P/E. With strong free cashflow generation, we also believe that BRC Asia can potentially offer dividend yield of 11% (assume a 60% dividend payout ratio).

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 | Kenneth TAN CGS-CIMB Research | 2022-08-04
SGX Stock Analyst Report ADD MAINTAIN ADD 2.500 SAME 2.500

Previous report by CGS-CIMB:
2022-05-12 BRC Asia - Riding On Industry Tailwinds

Target prices by 4 other brokers at BRC Asia Target Prices.
Listing of broker reports at BRC Asia Analyst Report.

Relevant links:
BRC Asia Share Price History,
BRC Asia Announcements,
BRC Asia Dividends & Corp Actions,
BRC Asia News Articles


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