With these new contracts, ISOTeam's order book has reached $186.5 million.
"We expect more and larger order wins going forward and management expects this trend to persist through the rest of the year, supported by Singapore’s robust pipeline of public infrastructure and housing projects," states Seet in his April 21 note.
What makes the company interesting to investors is its role as the only contractor using drones to paint buildings, which according to Seet can reduce costs by 30-40%.
The company is likely to begin a private pilot project by June before testing its AI drone-painting solution on an HDB site by the third quarter before rolling out to more estates.
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"We believe this will re-rate ISOTeam significantly if it can deliver these solutions," reiterates Seet.
He expects the company to report stronger earnings for the current FY2026, with already announced 1HFY2026 results for the half year ended Dec 2025 justifying his view.
Seet notes that the speed of contract wins also increased in recent months, and he expects another $30 to 40 million worth of order wins by July.
In addition, the company is seen to sell non-core assets worth between $7 and 10 million, with some of the proceeds to be paid out as special or higher ordinary dividends.
Seet's target price of 12 cents is based on 11x blended FY2026 and FY2027 earnings.
In her report also on April 21, Natalie Ong of CGS International points out that ISOTeam's deployment of drones has been delayed, as the company is still "fine tuning" the precision of the machines.
Nonetheless, the company believes it is still on track to deploy the drones for an industrial project by end of June, and to also stage a demonstration for a HDB project by then.
"As such, we think meaningful margin from drone utilisation would only be reflected from 2HFY2027 onwards, instead of 1HFY2027, says Ong, who has kept her "add" call.
She has trimmed her target price from 12 cents to 11 cents, which is pegged to 12x FY2027 earnings, which is +0.5 sd of ISOTeam’s 4-year historical average.
For Ong, key re-rating catalysts include stronger-than-forecast order book growth, and potential commercialisation of its BuildTech solutions, which could add new asset leasing revenue/geographical diversification opportunities.
Downside risks include lower-than-forecasted drone utilisation/availability of foreign labor/subcontractors, delays in contract completion.
ISOTeam shares traded at 8.6 cents as at 11.18am up 2.38%.
