“Soon Hock’s management team has developed and sold over 900 strata-titled units with total gross development value (GDV) exceeding $1 billion, ranking it among Singapore’s top five developers by gross floor area with a 6% market share,” she writes.
“Led by veteran founder Mr Tan Yeow Khoon, who is the ex-chairman for Cogent Holdings, the company’s user-centric design like ramp-up layouts and wide driveways differentiates its projects from peers’,” she adds.
To Mo, the group is likely to see better days ahead from its billion-dollar pipeline. The analyst pointed out that after a lull in FY2024 due to the absence of project temporary occupation permits (TOP), Soon Hock’s earnings are poised to rebound strongly as Stellar@Tampines (GDV $326 million) achieves partial completion in FY2025, followed by Skye@Tuas (GDV $354 million) in FY2026 and FY2027.
“These two 30-year leasehold projects underpin a three-year revenue CAGR (compound annual growth rate) of 178% and net profit CAGR of 124% over FY2024 to FY2027. Strong pre-sales and the redevelopment of 20 Shaw Road (GDV $235 million) extend growth visibility beyond FY2027,” Mo explains.
See also: RHB's Yeo trims Thai Beverage target price to 62 cents, sees better FY2026
Other positive factors include Soon Hock’s net gearing, which is expected to fall sharply to 1.4 times, from 8.6 times post-IPO, which will offer flexibility for site acquisitions. Furthermore, the planned disposal of Premier@Kaki Bukit in 1QFY2026 is expected to generate a disposal gain of around $390,000. Recurring income from Jalan Papan (300-bed dormitory) helps cushion development cyclicality.
In addition, Mo expects Soon Hock to be well positioned to capitalise on Singapore’s industrial upgrading, supported by initiatives like Tuas Mega Port and Changi Airport’s upcoming Terminal 5. Mo also highlights that the company’s projects in Tuas, Tampines and Woodlands are aligned with Singapore’s industrial zoning roadmap, ensuring resilient end-user demand and high tenant retention.
With that, Mo values Soon Hock based on 1 times its FY2026 P/B ratio, reflecting the company’s superior earnings growth and return on equity (ROE) to peers. Mo also highlighted that the management has committed to a minimum 25% payout for FY2025 and FY2026, translating into attractive yields of 5.5% and 10% respectively by her estimates.
As at 3.15 pm, shares in Soon Hock are trading flat at 59 cents.
