- Despite its decent 6.3% dividend yield, we opine that BRC Asia is fully valued at current levels, thus we maintain HOLD but with a higher target price of S$2.76.
- BRC Asia (SGX:BEC) posted 1QFY25 results that were within our expectations, with headline revenue at S$350.0m (-12.4% y-o-y), gross profit at S$28.7m (-19.0% y-o-y) and PATMI at S$19.5m (+13.9% y-o-y), representing 23%/18%/23% of our full-year estimates respectively and in line with our expectations.
Soft underlying results.
- - Read this at SGinvestors.io -
- The lower top-line revenue was largely due to a fall in steel prices and slow project offtake coupled with engineering delays that have hindered project completion. The greater-than-expected fall in 1QFY25 gross profit was largely due to an unfavourable product mix as steel prices dropped. As a result, 1QFY25 gross margin fell 0.7ppt y-o-y to 8.2%.
Solid orderbook.
- - Read this at SGinvestors.io -
- BRC Asia’s orderbook remains robust, standing at S$1.5b as at end-1QFY25. We expect the group to deliver half of its current orderbook in the next 3-4 quarters as volumes recover.
Robust growth in Singapore’s construction sector.
- Read more at SGinvestors.io.
