The company plans to pay 0.5 cent each in final and special dividend, bringing its FY2026 total to 1.25 cents, adjusted for 1-for-1 bonus issue. This gives a payout ratio of 54% and an "attractive" 6.3% yield.
According to Loo and Chan in their April 30 note, Reclaims Global remains a beneficiary of the construction upcycle in Singapore over the next few years.
The company’s role is to transform a raw or occupied site into a “build-ready” foundation. "This is the unglamorous but critical period before a single brick is laid or a crane is erected," state Loo and Chan.
Ongoing and upcoming big projects may include the $100 billion coastal protection works Reclaims Global can possibly try and capture down the road.
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As the company operates at the early stages of the construction process, it enjoys demand and secure cash flow at an earlier rather than later stage of these big projects, the analysts point out.
They also note that institutional interest in Reclaims Global has grown in recent months, with 63.2 million new and vendor shares transacted between 19.5 cents and 20.5 cents, bonus-adjusted.
However, with rising fuel costs, even amid a favourable industry outlook, Loo and Chan have trimmed their FY2027 earnings forecast by 3.9% to account for potential margin pressures.
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This has led to a slightly lower target price of 29 cents from 30 cents, which is based on 12.2x FY2027 earnings, the same valuation multiple fetched by the industry average.
Reclaims Global closed at 21 cents on April 30, down 2.38%.
