Boustead Singapore - OCBC Investment 2023-09-25: Diamond In The Rough

• As one of the oldest continuous businesses in Singapore, Boustead Singapore (SGX:F9D) is a progressive engineering and technology group with operations spanning Energy Engineering, Real Estate, Geospatial Technology, and Healthcare.
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• Boustead’s healthy balance sheet and strong net cash position also lends potential for the company to deploy cash through further investments and inorganic acquisitions to unlock value for shareholders, beyond the ongoing privatisation of Boustead Project (SGX:AVM).

Rebuilding the order book post-pandemic

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• Together with significant currency exchange gains, lower impairments and interest income, which more than offset the share of loss of associates and joint ventures, Boustead's FY23 profit before tax (PBT) was 38% higher y-o-y at S$76.5m.
• All in all, Boustead's FY23 net profit was 48% higher y-o-y a S$45.3m; after adjusting for other gains and losses, the company shared that net profit would have been down 3% y-o-y on a comparative basis.
• See Boustead's dividend history. Boustead announced a final dividend of S$0.025 per share, bringing its total dividend for FY23 to S$0.04 per share, flat from FY22.
• We note that the company had a healthy engineering project order backlog of S$556m and deferred services backlog of S$92m as at the end of FY23, and has reported stable contract win momentum year-to-date, which should lend itself to an improvement in performance going forward.

Long-term growth supported by secular tailwinds

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Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2023-09-25 SGinvestors.io

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