“The combined entity now possesses the technical depth, licensing breadth, and track record to compete for Singapore's largest infrastructure tenders,” Tee adds.
Ever Glory is also tipped to benefit from tailwinds such as the infrastructure super-cycle, which will provide it with multi-year revenue visibility.
Singapore’s construction demand is projected to range from $47 billion to $53 billion in 2025, driven by projects such as Changi Airport’s Terminal 5, the Cross Island Line, hospital developments and some 55,000 of build-to-order (BTO) launches from 2025 to 2027.
“Ever Glory’s predominantly public-sector orderbook aligns it directly with this policy-led pipeline,” says Tee. “With [its] orderbook now exceeding $500 million post-Guthrie Engineering and management targeting $700 million by year-end, [Ever Glory’s] revenue visibility extends through FY2027 - FY2028.”
Despite seeing some margin compression from its project mix, Ever Glory remains in a net cash position and has maintained positive operating cash flows. The company has also continued distributing dividends including an interim dividend of 0.5 cents per share in 2024. Tee also lauds the company’s asset-light model and careful management of working capital that enables disciplined expansion strategies without overstretching its balance sheet.
In addition, Every Glory’s minority stakes in two joint developments — a residential joint venture (JV) in District 14 and an industrial project at Mandai — adds upside. “While these remain non-core today ([at] less than 5% of FY2024 revenue), they provide option value as the projects monetise,” says Tee. “Management has signalled appetite for selective property investments, leveraging M&E expertise for integrated development opportunities.”
While Ever Glory’s revenue for the 1HFY2025 ended June fell by 11% y-o-y to $28.6 million, this was due to the natural completion cycle of larger contracts in 4QFY2024. The company’s newly-won contracts have not ramped up revenue recognition at the time either. With that, Tee believes the company will report a full-year revenue of $130 million for the FY2025, implying strong acceleration in 2HFY2025 as Guthrie Engineering’s contracts flow through to revenue recognition.
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Ever Glory’s order book now exceeds $500 million with management targeting to reach $700 million by the end of the year as new awards are secured. Guthrie Engineering’s orderbook currently stands at around $400 million with a year-end target of $600 million.
Tee is very bullish on Ever Glory’s prospects as she posits a 12-month target price of $1.20. This reflects the change in the company’s power post the acquisition of Guthrie Engineering, visible orderbook conversion and margin recovery as scale efficiencies materialise.
The target price also represents an upside of 72.8% from the company’s share price of 70 cents as at Dec 16.
To Tee, Ever Glory’s current share price represents a “significant discount” to its regional M&E peers despite its superior infrastructure exposure and faster growth trajectory.
“Our valuation factors in the full 2,000,000 shares on public offer, which slightly dilutes our shareholding base,” she writes.
On Oct 14, Ever Glory said it had applied to transfer its Catalist listing to Singapore Exchange’s (SGX) Mainboard. CEO Xu Ruibing had told The Edge Singapore his intention to move to the Mainboard in August, noting that the $150 million market cap requirement had been met.
On Dec 10, Ever Glory announced its intention to undertake a public offer of up to 2 million new shares at 64 cents apiece. The public offer is to fulfil the requirement of having a minimum of 500 shareholders per the listing rules.
Shares in Ever Glory closed flat at 69.5 cents on Dec 18.
