UOB Kay Hian
Date of Report: 23 June 2025

Singapore Construction Sector: Infrastructure Boom and Margin Recovery Set the Stage for Strong Growth

Singapore Construction Sector: Entering a New Growth Cycle

Singapore’s construction sector is on the cusp of a major upcycle, driven by a robust pipeline of infrastructure projects and easing margin pressures. Major undertakings such as Changi Airport Terminal 5 (T5), Tuas Mega Port, and the Marina Bay Sands expansion are setting the foundation for sustained growth. At the same time, falling material and labor costs are bolstering profitability across the sector. UOB Kay Hian maintains an OVERWEIGHT rating, reflecting a positive outlook for investors and industry stakeholders.

Key Infrastructure Projects Fueling the Sector

Changi Airport Terminal 5 (T5) – A Milestone in Infrastructure Investment – Recently, S\$5.75 billion worth of contracts for T5 were awarded: – S\$999 million for underground tunnels (automated people-mover, baggage handling, utilities) to Penta-Ocean-Koh Brothers JV. – S\$3.8 billion substructure package for the terminal and ground transport centre to China Communications Construction Company–Obayashi JV. – S\$950 million airside infrastructure package for taxilanes, support facilities, and remote stands to Hwa Seng Builder. – Out of the estimated S\$12.5 billion for T5, S\$4.75 billion has been awarded so far.
Tuas Mega Port and Marina Bay Sands Expansion
Tuas Mega Port: S$20 billion total investment, representing a multi-year stream of opportunities.
Marina Bay Sands: Integrated resort expansion valued at approximately S$10.4 billion.
These projects provide a steady flow of high-value contracts, allowing Singaporean construction firms and joint ventures to participate actively.

Sector Tailwinds: Cost Relief and Green Initiatives

Falling Input Costs – Prices for critical construction materials such as steel rebar, copper, stainless steel, steel flat, cement, and diesel are projected to decline by 1-13% year-on-year in Q2 2025, thanks to oversupply and competitive exports. – Labor cost inflation has dropped from 9% in 2023 to just 1.5% in 2024. – These cost reductions are expected to significantly enhance profit margins for most construction companies.
Government Support for Sustainability and Innovation
The Singapore government’s push for sustainability, productivity, and innovation is visible through initiatives like the Green Mark Certification Scheme and the Singapore Green Plan 2030.
Plans include quadrupling solar energy deployment and up to S$35 billion in green bonds issuance.
Companies aligning with these government priorities gain a competitive advantage and access to funding.

Sector Ratings and Top Stock Picks

OVERWEIGHT Maintained – The combination of strong infrastructure spending, easing cost pressures, and supportive green policies underpins the positive sector view.
Top Picks and Peer Comparison Table

Comprehensive Analysis of Key Companies

BRC Asia (BRC SP) – Steel Reinforcement Specialist

– Key supplier of steel reinforcement, benefiting directly from Singapore’s infrastructure upcycle. – Large orderbook (S\$1.5 billion, with 83% from Singapore). – Despite volume upside, HOLD maintained due to margin pressure expected from falling steel prices.

Centurion (CENT SP) – Indirect Beneficiary: Worker Accommodation

– Offers worker accommodation and stands to benefit if construction labor demand rises. – Healthy financials: EPS of 41.01 cents (2024), PE of 3.8x (2024), and a yield of 2.3%.

Hong Leong Asia (HLA SP) – Building Materials Leverage

– Exposure through building materials, with benefits tied to construction volumes and timing. – BUY rating with a target of S\$1.46. – 2024 EPS: 11.69 cents, 2025F PE: 21.7x, yield: 3.8%.

Pan-United (PAN SP) – Largest Ready-Mix Concrete Supplier

– Gains from higher project volumes and alignment with sustainability goals. – BUY rating, target S\$0.81, 2025F PE: 10.5x, yield: 4.8%. – 91% of revenue derived from Singapore.

Tiong Woon Corporation Holdings (TWC SP) – Heavy Lift and Logistics Leader

– Provides heavy lift and logistics for large-scale projects like T5 and Tuas. – 1HFY25 revenue: S\$79 million (+5% yoy), with Singapore as main revenue driver (73%). – International footprint expanding: Malaysia revenue tripled to S\$4 million, Middle East and Thailand also growing. – Strategic Saudi Arabia partnership (Samsung E&A) enhances future growth prospects. – Maintains BUY rating, target S\$0.64 (0.45x FY25F P/B).

CSC Holdings – Foundation and Geotechnical Engineering

– Essential for early-stage mega projects. – Orderbook: S\$300 million (81% from Singapore).

Hock Lian Seng – Specialist in Large-Scale Infrastructure

– Strong contender for upcoming T5 and Tuas contracts. – Singapore-focused revenue.

OKP Holdings – Civil Engineering Public Works

– Well-positioned for MRT and drainage upgrades. – 97% of revenue from Singapore, orderbook: S\$600.7 million.

Soilbuild Construction – Residential and Light Industrial Focus

– 100% of revenue from Singapore, orderbook: S\$1.26 billion.

Koh Brothers Eco – Water Infrastructure and Green Projects

– 55% of revenue from Singapore, orderbook: S\$828.7 million. – Aligned with government green project pipeline.

Wee Hur – Residential/Commercial Contractor

– 98% of revenue from Singapore, orderbook: S\$263.3 million.

Lum Chang – Diversified Contractor

– 100% of revenue from Singapore; selectively benefits from new projects.

Sin Heng – Heavy Lift and Crane Rental

– 73% of revenue from Singapore. – Benefits from logistics and lifting support for major projects.

Huationg – Heavy Equipment and Logistics

– 100% of revenue from Singapore, orderbook: S\$566 million.

Ley Choon – Underground Utilities and Civils

– 100% of revenue from Singapore, orderbook: S\$342.5 million. – Upside tied to MRT and drainage projects.

Hor Kew – General Contractor

– 100% of revenue from Singapore, orderbook: S\$553 million.

KSH – Mixed-use and Residential Exposure

– 98% of revenue from Singapore, orderbook: S\$230 million. – Potential beneficiary through subcontracting or joint ventures.

ISOTeam – A&A and Maintenance, Green Retrofit

– 100% of revenue from Singapore, orderbook: S\$188.7 million. – May benefit from increased green retrofit activity as sustainability gains ground.

Singapore Construction Sector: Outstanding Orderbooks and Revenue Breakdown

Conclusion: Robust Growth Outlook for Singapore Construction Sector

Singapore’s construction sector is entering a period of robust growth, supported by a strong pipeline of infrastructure projects, easing cost pressures, and government-led sustainability initiatives. Companies across the construction supply chain—from material suppliers and heavy-lift operators to contractors and maintenance specialists—are well-positioned to capitalize on this upcycle. Investors should focus on sector leaders with strong orderbooks, diversified capabilities, and alignment with green policies to maximize returns in the coming years.