BRC Asia, a steel mesh manufacturer, has been upgraded to a “Buy” rating by UOB Kay Hian, with a new target price of S$4.69, reflecting a 15.8% upside. This upgrade follows BRC Asia’s strategic acquisition of a 55% stake in Southern Steel Mesh, expanding its footprint in Malaysia and enhancing its regional presence. The company, which holds a dominant 55-60% market share in Singapore, is poised to benefit from increased construction activity and a robust orderbook.
BRC Asia’s recent acquisition of Southern Steel Mesh, which operates four manufacturing plants in Malaysia, provides a strategic foothold in the region. This move diversifies BRC’s revenue streams and enhances its scale in Southeast Asia. The acquisition aligns with the company’s strategy to upgrade operations and compete with other leading steel manufacturers.
The company’s record S$2b orderbook, bolstered by major contracts such as the Changi Airport Terminal 5 project, provides strong earnings visibility over the next few years. This orderbook is 35% higher than BRC’s FY24 revenue and is expected to be completed within three years, aligning with the ongoing construction upcycle.
Singapore’s construction sector is experiencing significant growth, with a 5.5% year-on-year expansion in Q1 2025. This growth is driven by public and private sector projects, including major infrastructure spending and a robust housing pipeline. The government’s allocation of S$19.6b for infrastructure in Budget 2025 further supports this trend.
BRC Asia’s strong market position, coupled with its strategic expansion and robust orderbook, positions it well for sustained growth. The company’s FY26 dividend yield of 5.3% adds to its attractiveness for investors.
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