Singapore Exchange Ltd (SGX)

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With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

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Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

Boustead Singapore Limited / Equity Bottom-Up

<p><i><b>These equity research reports are not written by the SGX.</b> SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</i></p><div>
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<h2>Boustead Singapore Ltd</h2>
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<p><strong>FY3/20 set to be a year of two halves</strong></p>
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<p>We maintain Add on Boustead with TP of S$1.00, as we expect PATMI growth to accelerate to 20.6% yoy in 2HFY3/20F (1H20: +1.4% yoy).</p>
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<p>Energy segment could make a comeback with a major contract (50% of segment orderbook) starting to contribute in 3QFY20F.</p>
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<p>Earningsfromgeospatialsegmentwillbeback-loadedin2HFY20F,as federal elections in key markets resulted in slower government spend in 1H.</p>
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<p><strong>Energy-related segment making a major comeback</strong><br>We expect PBT from Boustead’s downstream oil &amp; gas business to further surge 82.5% on a hoh basis in 2HFY3/20 (FY20F: S$9.6m PBT, +773% yoy), with a major S$100m contract (c.50% of segment orderbook) starting to contribute in 3QFY3/20. YTD, Boustead has secured c.S$190m (FY19: S$89m) worth of contracts to design, build and supply heat and control related process systems. We estimate segment orderbook to be at S$209m currently, a 5-year high. Management remains positive on further order wins, as it noted that more potential clients from the LNG and petrochemical industries are reaching final investment decisions.</p>
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<p><strong>Geospatial technology segment earnings to be back-loaded in 2H20</strong><br>Boustead’s geospatial technology segment had a slow start in 1H20 due to 1) federal elections in key markets including Australia and Indonesia, which resulted in government expenditure being withheld, and 2) FX headwinds. Management expects segment earnings to be back-loaded in 2H, and is expanding its sales team in anticipation of higher work flow. Aussie dollar has also stabilised against the US dollar and Singapore dollar since Sep 19. We forecast segment PBT to rise 10.8% yoy to S$15.7m in 2H20F (1H20: -9.2% yoy).</p>
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<p><strong>Two public sector projects to support property segment in FY20F</strong><br>Management noted that the uncertainties caused by Sino-US trade tension has resulted in corporates turning more cautious, thereby hurting Boustead’s order wins in the property segment YTD. Nevertheless, we believe the two ongoing public sector projects (S$242m JTC multi-storey recycling facility and S$200m Surbana Jurong Campus) could continue to support property segment earnings through FY21F, given their larger scale and longer project duration. We also expect Boustead’s leasing income to increase in the coming quarters, with ongoing ALICE@Mediapolis asset stabilisation and 85 Tuas South property starting to contribute.</p>
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These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.



Boustead Singapore Ltd




FY3/20 set to be a year of two halves







We maintain Add on Boustead with TP of S$1.00, as we expect PATMI growth to accelerate to 20.6% yoy in 2HFY3/20F (1H20: +1.4% yoy).


Energy segment could make a comeback with a major contract (50% of segment orderbook) starting to contribute in 3QFY20F.


Earningsfromgeospatialsegmentwillbeback-loadedin2HFY20F,as federal elections in key markets resulted in slower government spend in 1H.








Energy-related segment making a major comeback We expect PBT from Boustead’s downstream oil &amp; gas business to further surge 82.5% on a hoh basis in 2HFY3/20 (FY20F: S$9.6m PBT, +773% yoy), with a major S$100m contract (c.50% of segment orderbook) starting to contribute in 3QFY3/20. YTD, Boustead has secured c.S$190m (FY19: S$89m) worth of contracts to design, build and supply heat and control related process systems. We estimate segment orderbook to be at S$209m currently, a 5-year high. Management remains positive on further order wins, as it noted that more potential clients from the LNG and petrochemical industries are reaching final investment decisions.




Geospatial technology segment earnings to be back-loaded in 2H20 Boustead’s geospatial technology segment had a slow start in 1H20 due to 1) federal elections in key markets including Australia and Indonesia, which resulted in government expenditure being withheld, and 2) FX headwinds. Management expects segment earnings to be back-loaded in 2H, and is expanding its sales team in anticipation of higher work flow. Aussie dollar has also stabilised against the US dollar and Singapore dollar since Sep 19. We forecast segment PBT to rise 10.8% yoy to S$15.7m in 2H20F (1H20: -9.2% yoy).




Two public sector projects to support property segment in FY20F Management noted that the uncertainties caused by Sino-US trade tension has resulted in corporates turning more cautious, thereby hurting Boustead’s order wins in the property segment YTD. Nevertheless, we believe the two ongoing public sector projects (S$242m JTC multi-storey recycling facility and S$200m Surbana Jurong Campus) could continue to support property segment earnings through FY21F, given their larger scale and longer project duration. We also expect Boustead’s leasing income to increase in the coming quarters, with ongoing ALICE@Mediapolis asset stabilisation and 85 Tuas South property starting to contribute.
























Non-SGX Report: Boustead Singapore:  FY3/20 Set to Be a Year of Two Halves