- Despite its decent 6.4% 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$3.29.
- Moving forward, BRC Asia sees strong demand from a large number of upcoming HDB projects and mega infrastructure projects.
Results slightly above expectations.
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- The lower y-o-y revenue and gross profit were due to lower steel prices and a S$7.7m provision for onerous contracts respectively, leading to lower gross margins. The beat on our PATMI estimates was largely due to higher-than-expected other income and lower finance and operating costs. As a result, 1HFY25 gross margins fell 0.4ppt y-o-y while 1HFY25 PATMI margin grew 0.8ppt y-o-y.
Stable quarter.
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- BRC Asia's 2QFY25 PATMI grew 5.5% y-o-y, likely driven by lower finance costs and opex as mentioned earlier.
Comparable dividend declared.
- Read more at SGinvestors.io.
