BRC Asia Limited (BEC) AI Stock Analysis

• Market Cap: €845.00M
• Dividend Yield: 5.02%
• Average Volume (3M): 18.89K
• Price to Earnings (P/E): 8.7
• Beta (1Y): 0.46
• Revenue Growth: -13.76%
• EPS Growth: 10.28%
• Country: SG
• Employees: 726
• Sector: Industrials
• Sector Strength: 87
• Industry: Steel
• EPS (TTM): 0.15
• Shares Outstanding: 275,976,680
• 10 Day Avg. Volume: 17,670
• 30 Day Avg. Volume: 18,886
• PEG Ratio: 0.07
• Price to Book (P/B): 1.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.55
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €3.39
• Price Target Upside: 10.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 74 Outperform
• Price Target: ―

BRC Asia Limited demonstrates robust financial health with strong profitability and cash flow management, despite a recent decline in revenue. The technical analysis suggests positive momentum, although caution is advised due to near-overbought conditions. Valuation metrics enhance the stock's attractiveness, with a favorable P/E ratio and solid dividend yield. These factors collectively contribute to a strong overall score, positioning the company well for future growth opportunities.

Positive Factors

Acquisition Strategy

BRC delivered on its M&A strategy with the proposed 55% stake acquisition of Southern Steel Mesh, giving it a c.15% share in the Malaysian market.

Demand and Project Pipeline

BRC sees strong demand from a large number of upcoming HDB projects and mega infrastructure projects.

Order Book Strength

BRC Asia's order book is maintained at record levels of S$1.5bn, a 15% YoY increase, supported by major construction projects in Singapore.

Negative Factors

Project Delays

The lower top-line revenue was largely due to a fall in steel prices and slow project offtake coupled with engineering delays that have hindered project completion.

Project Delivery Uncertainty

Schedules and phases of key projects may undergo changes which could affect project delivery.

Steel Prices Impact

Lower steel prices continue to weigh down on revenue, with a 5.6% YoY decline in FY1H25 primarily due to a ~14% YoY fall in steel prices.

BRC Asia Limited Business Overview & Revenue Model

Company Description

BRC Asia Limited (BEC) is a leading provider of prefabricated steel reinforcement solutions in the construction industry. Headquartered in Singapore, the company specializes in manufacturing and supplying a comprehensive range of steel reinforcement products, including prefabricated mesh, cut and bend reinforcement bars, and cages. BRC Asia Limited serves various sectors, including residential, commercial, industrial, and infrastructure projects, positioning itself as a key player in the construction supply chain.

How the Company Makes Money

BRC Asia Limited generates revenue primarily through the manufacture and sale of steel reinforcement products. The company's key revenue streams include the sale of prefabricated mesh, cut and bend reinforcement bars, and other related steel products to construction companies and infrastructure developers. By focusing on innovation and efficiency in its manufacturing processes, BRC Asia Limited can offer competitive pricing and high-quality products, which attract a steady stream of clients across different sectors. Additionally, the company may engage in strategic partnerships or collaborations with construction firms and developers to secure long-term supply contracts, further contributing to its earnings.

BRC Asia Limited Financial Statement Overview

Summary

Overall, BRC Asia Limited displays a strong financial performance characterized by high profitability margins and effective cash flow management, despite recent revenue declines. The balance sheet reflects a low leverage position and high return on equity, underlining financial stability and prudent fiscal management. The company is well-positioned to capitalize on future growth opportunities while mitigating potential risks associated with revenue variability.

Income Statement

BRC Asia Limited has shown a solid gross profit margin of 10.38% and an impressive net profit margin of 6.32% for the recent period. While the revenue has declined by 8.93% compared to the previous year, the company has managed to maintain strong EBIT and EBITDA margins at 6.84% and 9.55% respectively, indicating robust operational efficiency. Despite the revenue contraction, profitability metrics remain favorable.

Balance Sheet

The company's balance sheet reflects a stable financial standing with a debt-to-equity ratio of 0.52, showcasing conservative leverage. The return on equity stands at 19.68%, reflecting effective utilization of equity capital. Additionally, with an equity ratio of 52.57%, BRC Asia Limited maintains a solid equity base relative to its assets, suggesting financial stability and lower risk.

Cash Flow

BRC Asia Limited demonstrates strong cash flow management with a significant increase in free cash flow by 20.73% year-over-year, and an impressive operating cash flow to net income ratio of 2.06. The free cash flow to net income ratio is robust at 2.02, indicating effective conversion of earnings into cash flow, which enhances financial flexibility.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	2.12B	1.48B	1.63B	1.70B	1.17B	612.38M
Gross Profit	204.17M	153.80M	139.05M	153.72M	82.13M	66.15M
EBITDA	126.56M	141.65M	122.51M	129.56M	79.03M	66.81M
Net Income	112.79M	93.54M	75.75M	90.22M	47.03M	20.35M
Balance Sheet
Total Assets	856.10M	904.02M	952.36M	973.11M	884.72M	619.95M
Cash, Cash Equivalents and Short-Term Investments	131.21M	191.37M	184.62M	154.57M	82.97M	77.89M
Total Debt	268.87M	245.73M	380.68M	457.98M	435.77M	279.26M
Total Liabilities	419.63M	428.73M	525.05M	574.32M	583.77M	355.40M
Stockholders Equity	436.47M	475.28M	427.31M	398.79M	300.95M	264.55M
Cash Flow
Free Cash Flow	42.88M	188.66M	156.26M	46.05M	-128.10M	119.56M
Operating Cash Flow	46.64M	192.97M	159.53M	48.96M	-126.16M	122.10M
Investing Cash Flow	-68.00K	2.82M	2.66M	-1.38M	-1.13M	-1.41M
Financing Cash Flow	939.50K	-183.03M	-127.02M	22.82M	135.86M	-111.83M

BRC Asia Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.08
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:BEC, the sentiment is Neutral. The current price of 3.08 is below the 20-day moving average (MA) of 3.12, below the 50-day MA of 3.09, and above the 200-day MA of 2.65, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 42.34 is Neutral, neither overbought nor oversold. The STOCH value of 76.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SG:BEC.

BRC Asia Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BEC	74 Outperform	€845.00M	8.70		5.02%	-13.76%	10.28%
E3B	70 Neutral	S$427.45M	7.76	8.58%	1.72%	-10.70%	-45.35%
Sector *	65 Neutral	$10.56B	15.49	5.57%	1.96%	2.71%	-26.28%

BRC Asia Limited Corporate Events

BRC Asia Limited Pursues Controlling Stake in Southern Steel Mesh

BRC Asia Limited has entered into a non-binding term sheet to acquire a controlling stake in Southern Steel Mesh Sdn. Bhd., a subsidiary of Southern Steel Berhad. This strategic move is intended to enhance BRC Asia’s operational efficiencies and market presence in Malaysia, aligning with its strategy to tap into regional markets and drive sustainable growth.