"Its record $2 billion orderbook, boosted by major wins like Changi Airport T5, provides strong multi-year earnings visibility.
"With favourable tailwinds, BRC Asia's earnings momentum is expected to continue going into FY2026," says Mo, adding that this stock has a "decent" FY2026 yield of 5.3% as well.
According to Mo, BRC Asia commands a 55-60% market share in Singapore’s steel market, which makes it a prime proxy to benefit from rising construction activity.
Last month, it completed the acquisition of a 55% stake in Southern Steel Mesh (SSM), which operates four manufacturing plants in Malaysia producing welded wire mesh and reinforcement products.
"The acquisition provides BRC with a strategic foothold into Malaysia, diversifies its revenue and enhances its scale in Southeast Asia. Management aims to enhance value by upgrading SSM’s operations to better compete with other leading downstream steel manufacturers," says Mo.
She notes that the company, within Singapore, is enjoying tailwinds from major infrastructure spending and housing. Besides the airport's Terminal 5 and various other MRT lines, there are some 9,755 private units to be launched this year and even more HDB flats.
All in, BRC Asia has built up a record order book of $2 billion, including a recent boost of $570 million for Terminal 5.
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The orders are to be filled in five years although the majority is expected to be completed within the next three years, in line with the ongoing construction upcycle.
"This provides earnings visibility, cost advantage and improved procurement, positioning BRC to defend margins even in a volatile steel price environment.
"While execution risk remains, the large orderbook provides a solid foundation for the coming years, and underpins BRC’s ability to sustain growth," says Mo.
Her revised target price of $4.69 is based on a 14x FY2026 earnings, a valuation multiple that is +2SD above its long-term average mean. Previously, she was using 7.6x FY2025, the historical mean.
"The higher multiple reflects BRC’s strong positioning as the dominant player in Singapore’s steel market and a prime proxy to the ongoing construction upcycle, which should drive sustained earnings growth," says Mo.
BRC Asia shares gained 1.18% to change hands at $4.30 as at 9.19 am. It is up 68.63% year to date.
