BRC Asia Limited: Hold Rating Amidst Revenue Decline and Valuation Concerns Despite Strong Order Book

Llelleythan Tan, an analyst from UOB Kay Hian, maintained the Hold rating on BRC Asia Limited (BRGA – Research Report). The associated price target is S$2.76.

Llelleythan Tan’s rating is based on a combination of factors influencing BRC Asia Limited’s current financial performance and future prospects. The company reported a decline in revenue and gross profit for the first quarter of FY25, primarily due to falling steel prices and slower project off-take. However, the net profit after tax and minority interests (PATMI) showed an increase, largely attributed to the reversal of provisions for onerous contracts.
Despite the positive aspect of a strong order book and anticipated demand from upcoming HDB and infrastructure projects, the current valuation of BRC Asia is considered fully valued. This assessment is compounded by the potential risks associated with changes in project schedules and phases, which could impact delivery timelines. Consequently, while the company offers a decent dividend yield, the stock is maintained at a Hold rating, reflecting a cautious stance on its immediate growth potential.

According to TipRanks, Tan is an analyst with an average return of -1.7% and a 48.57% success rate.