Besides a hefty contract from the port authority, Soilbuild has on hand numerous contracts to build public housing.
In addition, it runs a precast business with facilities in both Singapore and Johor, to meet stronger nudging from the government to adopt such construction methods.
Lim expects the company's revenue to grow at 18% CAGR between FY2024 and FY2027 to reach $763 million in FY2027, and to also generate improved operating margins of 13% over FY2025 and FY2027, up from 7% in FY2024, thanks to easing cost pressure.
She expects Soilbuild to generate stronger operating cash flow and turnaround of net debt position into net cash in the current 2HFY2025, which will open up the possibility of higher dividends paid by the company, whose controlling shareholders, executive chairman Lim Chap Huat and his son Lim Han Ren hold nearly 82% of the shares.
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With the congruence of various positive factors, Soilbuild's earnings is seen by Lim to more than double this current FY2025 to $61 million and grow further to $80 million by FY2027.
Soilbuild now trades at 9x FY2025 earnings, which is a significant discount off the 15x fetched by Boustead Singapore, Wee Hur and Lum Chang.
Lim's target price of $4.21 is based on 10x FY2026 earnings.
Soilbuild shares last traded at $3.19.
