CGS International
August 21, 2025
BRC Asia Ltd: Riding Singapore’s Construction Boom with Strong Market Leadership and Attractive Dividends

Introduction: BRC Asia at the Forefront of Singapore’s Steel Market

BRC Asia Ltd has once again demonstrated its dominance in Singapore’s steel sector, emerging as a primary beneficiary of the nation’s robust construction upcycle. With a commanding 55-60% market share and key contracts driving a record-high orderbook, the company offers investors both growth and generous dividends. This in-depth analysis explores BRC’s latest financial performance, strategic initiatives, market position, and how it stacks up against industry peers.

Q3 and 9M FY25 Financial Performance: Volume Drives Growth

BRC Asia’s Q3 and 9M FY25 results show a compelling growth trajectory, bolstered by surging offtake volumes and operational leverage. Despite a 14% YoY decline in steel prices, BRC achieved a 7% YoY revenue increase in Q3 FY25, signaling approximately 22% YoY sales volume growth—outpacing overall industry volume growth of 20% for April-May 2025. Gross profit margin (GPM) expanded to 11% (from 8.5% in Q3 FY24), and net profit margin (NPM) rose to 5.3% (from 4.6% in Q3 FY24), highlighting the company’s ability to benefit from economies of scale.

In the first nine months of FY25, revenue reached S$1,124.2 million and core net profit was S$63.9 million, representing 76% and 77% of full-year forecasts, respectively.

Orderbook Momentum and Market Position

BRC Asia continues to be a go-to supplier for major Singapore projects, including being one of just two key suppliers for Housing Development Board (HDB) Build-to-Order (BTO) projects, and one of six major rebar suppliers nationwide. Since 2023, HDB has launched 58,000 BTO units, with another 35,000 planned for 2026-2027, providing a multi-year pipeline through FY29.
Recent contract wins include a S$570 million steel reinforcement award for the Changi Airport Terminal 5 substructure, bringing the orderbook to S$2 billion as of July 2025. Management estimates a commanding 55-60% market share in the Singapore steel market.

Strategic Expansion: Southern Steel Mesh Acquisition and Restructuring

BRC completed the acquisition of a 55% stake in Southern Steel Mesh (SSM) in August 2025, aiming to unlock value by upgrading SSM’s machinery and aligning its practices with industry best standards. Phase 1 of restructuring—focused on machinery upgrades, manufacturing and procurement improvements, and staff retraining—is underway and set to continue through March 2026. This positions SSM to compete effectively with larger downstream steel players, many of which operate with aging equipment.

Dividend Yield and Valuation: Attractive Returns for Shareholders

BRC Asia remains a compelling dividend play, with a projected FY26 dividend yield of 6.3%. The company’s high payout is viewed as sustainable, thanks to healthy industry fundamentals and a robust order pipeline.
The target price has been raised to S$4.00 (from S$3.40), now based on FY26F P/E of 12x, which reflects the 20-year high for the construction cycle. This is a shift from the previous methodology, which relied on a price-to-book value multiple.
Key upside catalysts include strong volume growth and accretive M&A activity. Risks to watch include counterparty credit risks and a potential slowdown in the construction sector.

Peer Comparison: BRC Asia vs. Industry Rivals

BRC Asia stands out among its peers for its combination of earnings growth, high dividend yield, and return on equity.

Financial Highlights and Key Ratios

Below is a summary of BRC’s financial performance and outlook through FY27, including revenue, profit, and key balance sheet metrics.

ESG Analysis: Operational Risks and Sustainability Initiatives

BRC Asia’s ESG profile highlights both strengths and vulnerabilities:

• Workforce Dependency: Roughly 80% of BRC’s employees were foreign workers as of FY21. Regulatory changes to Singapore’s Dependency Ratio Ceiling (DRC) may increase wage costs or disrupt recruitment.
• Product Quality and Efficiency: BRC upholds strict quality standards (ISO 9001:2015, British Standard BS4449:2005, Singapore Standard SS560:2016) and continuously improves material efficiency, selling scrap steel for recycling.
• Workplace Safety: Accident Frequency Rate (AFR) fell to 2.9 in FY23 (from 14.3 in FY21), while Accident Severity Rate (ASR) dropped to 88.4 (from 330.2), reflecting significant safety improvements.

Conclusion: Outlook, Risks, and Investment Summary

BRC Asia stands out as a core beneficiary of Singapore’s construction boom, underpinned by a robust orderbook, market leadership, and a high, sustainable dividend yield. With strategic moves such as the SSM acquisition and ongoing operational enhancements, BRC is well-positioned to capture further growth.
Investors should monitor macro risks such as counterparty credit, regulatory changes affecting workforce composition, and broader economic slowdown that could impact construction demand. Nonetheless, BRC’s fundamentals and market position remain highly attractive for both growth and income-focused investors.

Stock Rating Methodology

• Add: Total return expected to exceed 10% over the next 12 months.
• Hold: Total return expected between 0% and +10%.
• Reduce: Total return expected to fall below 0%.

Distribution of Ratings (as of June 30, 2025)

• Add: 70.6% (1.1% investment banking clients)
• Hold: 20.5% (0.5% investment banking clients)
• Reduce: 8.9% (0.5% investment banking clients)

BRC Asia Ltd continues to be a top pick in Singapore’s building materials sector, offering investors a rare combination of growth, stability, and income.