UOB Kay Hian Private Limited
Report Date: 5 September 2025
BRC Asia: Riding the Construction Boom – Dominant Market Position, Record Orderbook, and Strong Dividend Yield Make for a Top Pick

Investment Overview: BRC Asia Upgraded to BUY with Higher Target Price

BRC Asia Limited (SGX: BRC) stands out as a prime beneficiary of Singapore’s accelerating construction upcycle. With a commanding market share in steel mesh supply, a record S$2 billion orderbook, and expanding regional operations, BRC is strategically positioned for multi-year earnings visibility and robust shareholder returns. UOB Kay Hian has upgraded BRC Asia to a BUY rating with a sharply higher target price of S$4.69, reflecting a 15.8% upside from the current share price of S$4.05.

Company Profile: Market Leader in Steel Mesh and Prefabricated Products

BRC Asia Limited designs, manufactures, and markets steel mesh under the BRC brand. Its broad product suite includes non-standard and customized mesh, as well as a wide array of prefabricated solutions such as beam and column cages. BRC’s strength is rooted in its dominant market position—commanding a 55-60% share of the Singapore steel market—and its ability to secure large, multi-year contracts.

Stock Data and Major Shareholders

Strategic Expansion: Regional Growth with Malaysian Acquisition

In August 2025, BRC Asia completed the acquisition of a 55% stake in Southern Steel Mesh (SSM), a regional manufacturer operating four plants across central and northern Malaysia. This move:

• Provides BRC a strategic entry into the Malaysian market
• Diversifies revenue streams beyond Singapore
• Enhances scale in Southeast Asia
• Allows for operational upgrades to boost SSM’s competitive position against other leading steel manufacturers

Tailwinds: Infrastructure and Housing Fuel Demand for Steel

BRC is set to benefit from both public and private sector construction booms:

• Singapore Budget 2025: S\$19.6 billion allocated to infrastructure, including projects such as Changi Airport Terminal 5 (T5), MRT expansions, Tengah Hospital, and the Woodlands North Coast industrial initiative.
• Housing Pipeline: Government Land Sales will release land for 9,755 private units in 2025 (50% above the 2021-2023 average). HDB launched 5,547 BTO flats in July 2025, with ambitious full-year targets (19,600 BTO flats and 10,200 sale of balance flats)—the highest annual supply since 2016.

Record Orderbook: Major Contract Wins Boost Multi-Year Earnings Visibility

A landmark contract in July 2025 saw BRC secure S$570 million for Changi Airport T5, its largest single win to date. This drove the total orderbook to a record S$2 billion—35% above FY24 revenue. The orderbook is spread over five years, with most revenue recognized in the next three, giving BRC:

• Strong earnings visibility
• Cost advantages and improved procurement
• Resilience against steel price volatility

Financial Performance Snapshot: Key Metrics and Outlook

Sector Momentum: Singapore’s Construction Cycle Accelerates

Key indicators from 1Q25 highlight the sector’s strengthening fundamentals:

• Construction output rose 5.5% year-on-year, up from 4.4% in 4Q24
• Contracts awarded surged 45.9% year-on-year, reversing previous quarter’s contraction
• Public residential contracts soared 116%, and industrial projects 422%
• Construction employment growth remains positive, unlike declines in manufacturing/services

Mega-projects such as Changi Airport T5, Tuas Mega Port, and the Cross Island MRT line, combined with record HDB launches, are expected to sustain robust demand for steel in the medium term.

Balance Sheet and Cash Flow Summary

Valuation and Recommendation: Attractive Dividend Yield and Upside Potential

BRC Asia’s valuation has been rolled forward to FY26, with a target multiple of 14x PE (two standard deviations above long-term average), reflecting its market dominance and positive sector outlook.
The upgraded target price of S$4.69 offers a 15.8% upside.
Attractive FY26 dividend yield of 5.3% is supported by strong cash flows and earnings visibility.
Key catalysts include a faster-than-expected construction recovery, relaxation of foreign labour restrictions, and additional public housing awards.

Risks and Earnings Revision

No changes have been made to earnings forecasts in this review.
Execution risk on large contracts is acknowledged, but the orderbook underpins sustained growth and margin defense.

Conclusion: BRC Asia – A Top Proxy for Singapore’s Construction Upswing

With an unrivalled market position, clear sector tailwinds, a record orderbook, and a robust pipeline of infrastructure and housing projects, BRC Asia is exceptionally well-placed for both near- and medium-term growth. Investors are also rewarded with a strong and rising dividend yield. UOB Kay Hian’s BUY rating and higher target price reflect confidence in the group’s multi-year earnings trajectory and its status as a core holding for exposure to Singapore’s infrastructure-led growth story.

About the Analyst

Heidi Mo Email: [email protected] Tel: +65 6590 6630

Disclaimers and Regulatory Information

This report is prepared by UOB Kay Hian Private Limited. It is not an offer or solicitation to deal in securities. The report is for informational purposes only and should not be construed as investment advice. Please consult a licensed financial adviser for personalized recommendations. The report is distributed in accordance with local regulations in the relevant jurisdictions.