Huationg is led by its executive chairman, Ng Hai Liong, who has over 50 years of industry experience and is supported by a long-tenured management team.
Mo and Tang write in their Feb 19 report: “This underpins Huationg’s ability to deliver complex, large-scale public infrastructure projects reliably to key government agencies.”
Presently, the group has an orderbook of some $512 million, expected to be completed over the next three years. With civil engineering contracts surging in-line with Singapore’s current infrastructure cycle, Huating’s core segment formed 93% of its revenue in the 1HFY2025 ended June 30, 2025.
According to the analysts, this is one of the “highest levels disclosed to-date” and is equivalent to two times the group’s FY2024 revenue.
In the 1HFY2025, the group’s civil engineering revenue increased by $33 million y-o-y, offsetting the $25.4 million revenue loss in dormitory revenue. Total revenue remained stable y-o-y while gross profit rose 5.3%, demonstrating cost efficiencies.
“Margins are also expected to remain stable at current levels, and should increase as Huationg gains more operating leverage and improves its project mix as contracts continue to roll out,” write Mo and Tang.
“Its project exposure spans mega-developments like Changi Airport Terminal 5, MRT expansions and Tuas Port. With its strong $512.3 million orderbook, the group has multi-year earnings visibility. Its A1 status unlocks access to large public tenders, a moat shared by only a select group of players,” add the pair.
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Huationg is also backed by its net cash position of $56 million and its fleet of 700 units of earthmoving machinery and 250 trucks. This, the analysts note, helps the group enjoy low gearing and high capital efficiency.
They expect the group to register an earnings growth of about 10% y-o-y over the FY2025 to FY2027, at 12.9%, 9.7% and 8.3% respectively.
They continue: “It manufactures recycled materials in-house, reducing input costs and boosting margins. Dividends have resumed post-pandemic, rising to 1.1 cents in 2024 with room for further growth. Its recent $7.08 million share placement, anchored by institutions, underscores growing investor confidence.”
With this, Mo and Tang have initiated coverage on Huationg with a “buy” recommendation and a target price of $1.15, which implies a 36.1% upside.
They write: “Our target is pegged to 11.0 times FY2026 price-to-earnings ratio (P/E), which is at a 14% discount to peers’ average of 12.8 times. In our view, Huationg is deeply undervalued at its mere trading multiple of 8.1 times FY2026 P/E, or a 37% discount to peers.”
This, Mo and Tang note, is despite its high return on equity (ROE) of around 14% and three-year earnings compound annual growth rate (CAGR) of 8% for the FY2024 to FY2027, driven by strong construction industry tailwinds and strong balance sheet with net cash of around $56 million.
“Excluding this cash balance, Huationg’s ex-cash P/E stands at approximately 5.3 times, suggesting that the market is valuing its core operations at a relatively undemanding multiple. As one of the established contractors within Singapore’s construction ecosystem, Huationg is well-positioned to benefit from the ongoing construction upcycle in the near to medium-term,” write the pair.
As at 12.32 pm, shares in Huationg Global are trading 2.5 cents higher at 90 cents.
