UOB Kay Hian
10 July 2025

Singapore Construction Sector Set for Strong Gains: Key Stocks to Watch as Infrastructure Demand Surges in 2025

Singapore’s construction sector is gaining momentum, fueled by robust public infrastructure projects and rising demand for ready-mix concrete (RMC). With costs remaining stable and a healthy pipeline of developments, select companies are poised to outperform. Here’s a comprehensive analysis of sector trends, financial performance, and top stock picks for 2025.

Singapore Construction Sector: Concrete Demand Powers Growth

The Singapore construction industry is experiencing renewed vigor, driven by surging infrastructure demand and escalating volumes of ready-mix concrete (RMC). Industry projections estimate RMC demand could reach up to 14.5 million m³ in 2025, buoyed by mega-projects such as Changi Airport Terminal 5, the Cross Island MRT, Tuas Port expansion, and new HDB developments. The sector’s outlook is further strengthened by ongoing activity in private residential, industrial, and mixed-use segments.

• Ready-Mix Concrete Volumes: RMC deliveries climbed to 1.113 million m³ in April 2025 from 1.042 million m³ in March 2025. Industry demand is forecast to rise from 13.4 million m³ in 2024 to a range of 13.0–14.5 million m³ in 2025.
• Stable Input Costs: Steel rebar prices were around S\$697/tonne as of May 2025, down 14% year-on-year. Cement prices declined 6% year-on-year to approximately S\$104/tonne, while RMC prices remained stable at S\$120/m³. The tender price index showed minimal inflation, edging up to 138.4 in 1Q25 from 137.7 in 2024.
• Margin Outlook: The subdued input cost environment, combined with stable RMC prices, is supporting improved EBITDA margins and providing upside potential for sector players.

Sector Strategy: Overweight with Focused Picks

UOB Kay Hian maintains an OVERWEIGHT stance on the Singapore construction sector. Rising RMC demand, a robust public infrastructure pipeline, and stable material input costs underpin this positive outlook. The steady tender price environment offers margin support for contractors, while higher volumes enhance top-line visibility for suppliers.

Top Picks:

• Hong Leong Asia (HLA SP): BUY, Target Price: S\$1.93 (current: S\$1.63)
• Pan-United (PAN SP): BUY, Target Price: S\$1.06 (current: S\$0.895)

Peer Comparison: Key Financial Metrics

Company Analysis: In-Depth Review of Key Players

Hong Leong Asia (HLA SP) – BUY, Target: S\$1.93

• Market Position: HLA commands about 20% share in Singapore’s RMC market, making it a major beneficiary of the construction upcycle.
• Singapore & Malaysia Exposure: Robust demand is anticipated on both sides of the border. In Malaysia, construction activity remains strong, with the value of works completed in 1Q25 at RM42.9 billion (+2.1% qoq, +16.6% yoy)—the 13th consecutive qoq increase since 3Q21.
• Growth Drivers: Upcoming mega-projects in Malaysia, such as Mass Rapid Transit Phase 3, Pan Borneo Sabah Phase 1, High Speed Rail, and Sabah-Sarawak Link Road, will further boost sentiment and orderbooks.
• Valuation: HLA’s building materials unit (BMU) and diesel engine segments are valued at S\$949m (7x 2025F EV/EBITDA) and S\$1,025m (8x 2025F EV/EBITDA) respectively. Target price has been raised to S\$1.93, reflecting a brighter outlook.
• Share Price Catalysts:
  • Potential for better-than-expected dividends
  • Upside surprise from stronger sales in engines and building materials

Pan-United Corporation (PAN SP) – BUY, Target: S\$1.06

• Market Leadership: With a commanding 40% share in Singapore’s RMC market, Pan-United is ideally positioned to leverage the next wave of construction projects.
• Revenue Outlook: Increased construction activity is expected to drive orderbooks and revenue growth, especially for cement and RMC suppliers.
• Valuation: The target price is set at S\$1.06, based on a PE multiple of 14x 2025F earnings, in line with regional averages.
• Share Price Catalysts:
  • Earnings-accretive acquisitions
  • Higher-than-expected number of infrastructure projects awarded
  • Potential for better-than-expected dividends

Orderbook and Revenue Exposure by Company

*Based on 1HFY25 results

Other Noteworthy Companies and Sector Averages

• BRC Asia (BRC SP): HOLD. Trading at 9.5x 2025F PE, with a 6.1% yield. Strong orderbook of S\$1.5bn, 83% of revenue from Singapore.
• Tiong Woon (TWC SP): BUY. Attractive 2025F PE of 8.2x, with 73% revenue exposure to Singapore.
• Soilbuild Construction: Not rated, but strong 2025F PE at 4.1x and a 100% Singapore revenue base.
• Other Notables: Wee Hur, OKP, Hock Lian Seng, Lum Chang, Sin Heng, Isoteam, Huationg, Hor Kew, CSC, Koh Brothers Eco, KSH, Ley Choon, Nam Lee, GRC – most have solid Singapore-centric orderbooks and attractive valuations.

Conclusion: Sector Poised for Sustained Outperformance

Singapore’s construction sector is entering a period of concrete gains. With demand for ready-mix concrete on the rise, and the government’s infrastructure pipeline remaining strong, companies with significant market share and diversified project exposure stand to benefit most. Hong Leong Asia and Pan-United are the lead proxies for investors seeking exposure to this growth story, while BRC Asia and Tiong Woon offer value in select niches. Stable costs and robust orderbooks set the stage for margin expansion and earnings visibility as 2025 unfolds.

Disclaimer: This article is based exclusively on research provided by UOB Kay Hian as of 10 July 2025.