- 1H26 revenue and PATMI were below our expectations, at 36%/41% of our FY26e forecasts respectively. This was mainly due to a 59% decline in precast revenue to S$24.2mn, due to delays in project recognition. Many of the precast projects were in design phase. We expect production to ramp up in 2H26e and into 1H27e.
- 1H26 PATMI increased 25.8% YoY to S$35.6mn. This was driven by a 24% YoY increase in 1H26 construction revenue, as key projects such as PSA Supply Chain Hub @ Tuas and Loyang Way projects progress. 1H26 net margins also expanded by 1.9 ppt YoY to 12.3%, 8.2 ppt higher than the average local peers’ net margins of 4.1%, driven by operational leverage and timely project deliveries.
- We maintain BUY with unchanged TP of S$1.20. We rolled forward our model and lowered our FY26e revenue by 11% due to delays in precast project recognition. We raised our FY26e PATMI by 2%, due to potential margin expansion from the expected completion of PSA Supply Chain project by FY26e. We lowered our valuations multiple from 9x to 8.5x FY27e P/E to reflect lower visibility from the smaller order book of S$800mn (1H25: S$1.19bn) following the progress of major projects with exceptional scale. Nonetheless, we believe Soilbuild can gradually win more tenders and expand its order book size beyond S$1bn. Higher industrial demand is expected as 29% more industrial land is released from the Industrial Government Land Sales (IGLS) programme for 2H26. Soilbuild increased its proposed interim dividend payout ratio by 18 ppt YoY to 30% and trades at an FY26e dividend yield of about 6.2%.
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