However, a smaller counter, Nordic Group (SGX:MR7
) , is gaining attention for its security angle, and is also expected to benefit from the upcycle given its exposure to mission-critical infrastructure, note the OCBC analysts.
The company, better known for providing maintenance services for heavy industries, is also the owner of Starburst, a previously listed company that specialises in building and maintaining shooting ranges for public sector organisations across the region.
Nordic has been generating a bigger proportion of revenue from customers in law enforcement, security agencies and civil authorities. From 17% of FY2022’s total revenue, this proportion gradually increased to 19% in FY2024 and in the most recent FY2025, 21%, which makes this the second largest segment after 25% from the semiconductor industry.
The company’s specific potential upside from the security theme is unknown, but, in the meantime, analysts are already liking this counter for its growing order book tied to other industries that it serves.
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Troy Cheng of OCBC Group Research sees a bigger growth momentum for Nordic ahead, noting its bigger order book of $201.9 million as at the end of FY2025, boosted by more maintenance contracts, which can increase its recurring income stream.
In FY2025, Nordic’s book-to-bill ratio improved to 1.32 times, signalling strong demand visibility and underpinning potential revenue contribution for the next two financial years. “Coupled with $119 million in contract wins across FY2025 and spanning deliveries through 2028, the group remains well positioned to sustain steady topline momentum,” says Cheng in his March 6 note.
At the same time, Cheng flags Nordic’s more than four decades of relationship with leading memory and semiconductor manufacturers will help provide a strong foundation for future growth, given the ongoing semiconductor tailwinds.
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Envipure, which is Nordic’s clean room solutions subsidiary, will benefit from the expansion cycle, as it wins more orders to supply hydraulic and water treatment systems essential in semiconductor facilities.
Specifically, Micron, a long-term customer, has announced a US$24 billion ($30 billion) expansion of its Singapore facilities. “This creates potential for new project awards as well as recurring maintenance work. Even as Micron’s new facility is expected to begin operations only in 2HFY2028, suggesting a medium-term earnings impact, the strengthening demand environment already enhances Nordic’s visibility and strategic positioning within the semiconductor ecosystem, in our view,” Cheng adds.
He is reiterating his “buy” call with a higher fair value estimate of 60 cents for Nordic Group, up from 59 cents previously, which is based on 11.3 times FY2026 earnings. The fair value is supported by an attractive upside potential of around 30%, with the counter offering a decent FY2026 dividend yield of 4.6%.
Hashim Osman of PhillipCapital has also kept his target price, which is already at a more bullish 63 cents. “The company is riding an upcycle in new projects from defence, batteries, marine, and the semiconductor sector, which we expect to drive earnings growth,” he says in his March 6 note.
Hashim notes that the company’s total sales pipeline is now around $305 million, with project services making up the majority at $260 million, while maintenance services make up $46 million. Among the different industry segments, defence contracts lead the pipeline of projects.
Upon project delivery, Nordic would usually then convert these into maintenance contracts, implying further recurring earnings down the road.
While Hashim warns that Nordic’s operations in the Middle East via its subsidiary Starburst may see an impact from supply chain disruption if the ongoing war becomes prolonged, the impact should not be “substantial.” This is because Singapore remains Nordic’s primary market, with upcoming sizeable tenders such as the Multi-Mission Range Complex 2 contract to be built in Bedok Camp and Paya Lebar Air Base relocation opportunities providing pipeline visibility, he adds.
