Report Summary

• BRC Asia Ltd’s 1QFY26 profit after tax and minority interests (PATMI) rose 48% year-on-year to S\$28.8m, beating expectations due to higher sales volumes, economies of scale, and lower finance costs.
• The company’s orderbook reached a new high of S\$2.2bn, with earnings expected to peak in FY27F/28F, benefiting from Singapore’s construction upcycle and the Equity Market Development Programme (EQDP).
• BRC actively manages project concentration risk by taking on smaller projects and reducing exposure to large ones, enhancing earnings resilience.
• The company is classified as an early-cycle beneficiary in the construction sector, with increased trading revenue and sales volumes leading to raised EPS forecasts and a higher target price of S\$5.40.
• ESG highlights include a focus on productivity, material efficiency, and workplace safety, leveraging factory fabrication to reduce manpower risks and improve buildability.
• Financials show steady revenue growth, improved margins, strong cash flow, and a net cash position, with robust dividend yields and return on equity.
• Risks include potential delays from labour and material bottlenecks, counterparty credit risks, and economic slowdown impacting construction demand.