In a briefing on Jan 6, Sanli’s CEO Sim Hock Heng indicated that the PUB is the client involved, and that the project in contention, worth $72.67 million, was awarded in July 2021 for the construction and commissioning of new disinfection systems at Johor River Waterworks (JRWW), located at Kota Tinggi, which, for historical reasons, is operated by PUB.
According to Sim, the project has been delayed for more than a year, but is unable to disclose the amount of claims by PUB. He stresses that he is actively resolving the matter, requesting time extensions and that these requests are “pending determination”. Sim says he is confident that Sanli has its grounds and is not at fault for the delay and that he will try to resolve the issue by the end of this financial year ending March.
Engineering water
News of PUB’s letter of demand has put the brakes on Sanli’s share price, which began its steep climb last June from below 10 cents. In contrast, Sanli shares are now trading about 32 cents to 35 cents.
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On his part, Sim says he is upbeat about growth from expansion into new markets and diversification into new services, as the company he founded in 2006 continues to press ahead with these efforts. The company, listed in June 2017, is in the business of providing engineering, procurement and construction (EPC) services for waste and water management.
Speaking at the Singapore Equities Forum organised by the Securities Association of Singapore recently, Sim notes that Singapore spends nearly $1 billion a year on water infrastructure.
Over the years, Sanli has won contracts worth at least $433 million from PUB, ranging from the construction of water treatment plants to subsequent maintenance and repair work.
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Awarded BCA L6 licences for ME05 and ME11 by the Building and Construction Authority (BCA), Sanli is one of the few companies that qualify to bid for large-scale infrastructure projects of unlimited contract value in Singapore. The L6 accreditation is the highest accreditation level that signifies a company’s financial strength and technical capability. ME05 and ME11 denote the areas of electrical engineering and mechanical engineering, respectively.
To date, it has won more than 15 EPC projects in Singapore. It is engaged to manage more than 40 maintenance contracts concurrently, providing the company with a stable and predictable revenue stream in a defensive industry. Besides Malaysia, Myanmar and Thailand, where Sanli is already in, Sim is eyeing new regional markets, including Indonesia and Vietnam.
As a result of Sanli’s experience and track record, it was able to win over higher-value repair and maintenance work for clients such as PUB. Having said that, the company wants to expand its presence in the sector’s value chain by enhancing its capabilities to become the local specialist for international equipment manufacturers and represent them in the markets Sanli operates in. Sim believes that by building in-house expertise to serve customers better, Sanli can command a “higher” premium and not just be a contractor supplying labour for maintenance work.
Diversification strategy
Sim notes that the company’s track record has put it in a strong position to win contracts from other public sector customers, such as the National Environment Agency, the Land Transport Authority and transport operator SMRT. Besides water-related infrastructure, Sanli is eyeing contracts to provide maintenance and repair services for power plants, air pollution control, waste-to-energy systems and other sites where its engineering expertise can be applied.
The company also sees opportunities in chemical engineering. Sim says that, as a vendor in the water treatment space, Sanli believes that magnesium hydroxide will increasingly be used for wastewater treatment and other industrial applications, such as marine exhaust gas cleaning to remove sulphur oxides and extracting struvite for fertiliser.
So far, Sanli has successfully performed a magnesium hydroxide slurry top-up on a vessel. On extracting struvite from wastewater, Sim says it is embarking on a pilot in Malaysia. As an indication of Sanli’s growing market share in this area, the company has built a plant on its Jurong premises to manufacture magnesium hydroxide.
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With solar photovoltaic costs coming down by 80% to 90% over the last decade, Sanli has also set its sights on contributing to the global energy transition. It has managed to penetrate the Thai market, securing renewable energy projects totalling 2.0 MW and power purchase agreements (PPAs) with reputable customers lasting more than 15 years. Sanli targets to have 12 MW of solar capacity by 2037 and sees renewable energy as a recurring income stream underpinned by long-term PPAs.
Relationship not damaged
In line with increasing orders, greater revenue recognition, and better margins, the company’s bottom line has improved significantly. On Nov 14, 2025, it reported earnings of $3.2 million for its 1HFY2026 ended Sept 30, 2025, up 84.1% y-o-y. The earnings growth was in line with William Tng’s expectations at CGS International, who has an “add” call and target price of 47 cents.
Jarick Seet of Maybank Securities is slightly more bullish. This counter is included in the brokerage’s list of stocks that are potential beneficiaries of stronger interest from both retail and institutional investors. In his most recent note on Jan 22, Seet is optimistic that Sanli’s contractual issue with PUB will be resolved amicably.
“We believe the relationship with this key customer remains strong, as the delayed project has likely been ongoing for some time,” says Seet. He points out that even so, Sanli has continued to secure significant contracts, including a $205 million award in October 2025 and another $105.3 million in July 2025. “In our view, these contracts would not have been awarded if the relationship were damaged,” he reasons.
Seet is maintaining his “buy” call and target price of 50 cents for the stock, as he is confident the company is on track to deliver record profits over the next few years. Seet is also suggesting further upside in the inkling, despite another PUB contract having closed, although the winner not yet been announced. Sanli, which has put in a bid of $142.5 million, stands a “reasonable” probability of winning this contract. If so, Sanli’s order book will reach more than $900 million. For context, back in July 2017, the order book was just $125.1 million. “Combined with its record order book, this could drive record revenues and profitability in the coming years.”
New growth areas
Meanwhile, even with its order book already at a record of nearly $800 million, Sim sees potential for further growth. Firstly, he sees opportunities in Singapore’s deep tunnel sewerage system, which would cost the government around $10 billion over multiple years. Sanli has thus far secured three contracts to collect sewer waste for industrial use and treat it into NEWater, with more contracts expected to be up for bidding. More importantly, he claims that overseas markets, such as Hong Kong and Macau, are adopting the same model, which means Sanli can cite its track record and improve its chances of penetrating these markets.
With climate change and coastal protection as the Singapore government’s foci, Sanli also sees opportunities in the coastal protection and flood control market, which could be worth up to $100 billion in government spending over the long term. Sim believes that Sanli’s participation in Pulau Tekong’s land reclamation project puts it in a good position to win contracts for coastal protection projects, especially in handling the mechanical and water management systems for the new polder area.
The third growth opportunity identified by Sanli pertains to the transportation sector. Sim notes that there are many opportunities, such as the Cross Island Line MRT line (worth over $40 billion) and Changi Airport Terminal 5 (worth $10 billion), for Sanli to participate in. However, Sanli will still keep an eye on its core sector, with the upcoming water treatment and desalination plants.
Despite the growth prospects, Sim is careful not to appear giddy. He says there is no shortage of opportunities and is “ready to seize them all”. “We are balancing this and management is thinking critically about how to get more jobs and lower risk.”
