Having recently raised S$10m via share placement and convertible bonds, dilution has kicked into ISOTeam (SGX:5WF)’s EPS. Dampeners to its immediate growth visibility include an 11% lower orderbook in FY25 vs FY24, slower pace of revenue recognition, moderating construction GDP growth, and slow commercialisation of its drone technology.
Awaiting more positives; dampeners include shrinking orderbook.
- Read this at SGinvestors.io -
- Read this at SGinvestors.io -
Anticipate drone commercialisation to kick in later, from FY27F.
While the recent fundraising has helped to finance its drone technology development and commercialisation, it has led to a 12% EPS dilution on our projected earnings. Full commercialisation of its drone technology will take time. With pilot projects targeted only from 4Q26F, commercialisation is expected only in FY27F.
Additionally, it will require another S$2m for drone R&D costs. Even after drone commercialisation in FY27F, revenue should ramp up progressively before it benefits from a full year’s contribution in FY28F.
Most importantly, ISOTeam’s orderbook needs to grow. We await more project wins and for the pace of project recognition of pick up before we consider upgrading our stock recommendation to BUY.
Further EPS dilution when share price approaches S$0.09126 conversion price.
Read more at SGinvestors.io.
Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
