Broker Name: CGS International
Date of Report: January 23, 2026
Excerpt from CGS International report.
Report Summary:
- Singapore’s Building and Construction Authority (BCA) has raised its 2026 construction demand forecast to S\$47bn-53bn, supporting an extended construction upcycle with contract awards remaining strong through 2026 and elevated until at least 2029.
- The sector is expected to deliver robust earnings growth (EPS CAGR of up to 41% for covered names) and high ROE (16-24%) through FY28F, with earnings peak shifting later to FY28F/29F.
- Top picks include Sanli Environmental, Soilbuild Construction, and Tiong Woon Corp, each offering 28-32% upside to target prices which are still based on conservative historical average P/Es.
- Major projects such as Changi Airport Terminal 5 and Marina Bay Sands Integrated Resort 2 are key drivers, with over S\$13bn in contracts yet to be awarded, much of which will benefit local subcontractors and materials suppliers.
- Singapore’s structural pipeline includes public housing, new MRT lines, and coastal protection, increasing visibility for sustained sector growth into the 2030s.
- Sector re-rating catalysts include strong contract wins, earnings-accretive mergers and acquisitions, and continued government infrastructure spending, while risks include project delays and work stoppages.
- ESG and workplace safety are increasingly critical, with government tender requirements favoring companies with strong safety and sustainability track records, especially for public projects.
- Valuations for main sector players remain undemanding, with potential further upside if market re-rates to higher P/E multiples consistent with extended cycle expectations.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgs-cimb.com
