They include a “robust” 2HFY2026 ended Jan 31, with earnings up by over 50% y-o-y due to the faster-than-expected execution of projects with good margins. Economies of scale are also likely to underpin profit margin expansion, they write.
Other catalysts include higher consensus estimates following Reclaims Global’s full-year earnings release in March and a better-than-expected final dividend payout due to higher profitability, robust net cash balance sheet and upbeat business outlook.
Finally, Reclaims Global will hold its extraordinary general meeting (EGM) in March to approve its 1-for-1 bonus issue, which will help improve the trading liquidity of the stock. Shareholders will also be entitled to higher dividends as the bonus shares will be entitled to the final dividend payout in April or May.
In the longer term, Reclaims Global is deemed to be a beneficiary of Singapore’s construction upcycle over the next few years.
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“Demand is likely to remain strong with BCA (Building and Construction Authority) forecasting $47 billion to $53 billion in construction contracts for 2026, similar to the robust 2025,” say Loo and Chan.
Furthermore, institutional interest in Reclaims Global has grown in recent months with 31.6 million new and vendor shares transacted at an average price of 39 cents to 41 cents per share.
In the mid- to long-term, the analysts also see the potential for special dividends to be distributed once its development project — which is expected to be sold in the next two years — is successfully monetised.
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Loo and Chan’s target price is pegged to an FY2027 P/E ratio of 12.2 times, which is around the same average of Reclaims Global’s peers.
As at 2.26pm, shares in Reclaims Global are trading 1 cent higher or 2.13% up at 48 cents.
