CGS-CIMB analyst Natalie Ong reiterated a Buy rating on BRC Asia Limited (BRGA – Research Report) on May 26 and set a price target of S$3.40.
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Natalie Ong’s rating is based on BRC Asia Limited’s strategic acquisition and strong financial performance. The company has proposed acquiring a 55% stake in Southern Steel Mesh, which is expected to significantly increase its market share in Malaysia. This acquisition is seen as a value-unlocking opportunity, allowing BRC to modernize SSM’s operations and compete more effectively in the downstream steel market.
Additionally, BRC’s financial results for the first half of FY25 show a net profit increase of 9% year-on-year, supported by favorable foreign exchange movements and reduced finance costs. Despite a decline in revenue due to lower steel prices, BRC’s order book has reached a record high, indicating strong future demand. The company’s attractive dividend yield and the potential for further earnings growth through strategic mergers and acquisitions further support the Buy rating.
In another report released on May 26, Phillip Securities also maintained a Buy rating on the stock with a S$3.40 price target.