Advertisement

5 Small-Cap Construction Plays You Should Know

According to CIMB, Building and Construction Authority (BCA) projects that the value of construction contracts awarded this year is expected to rise. Mega infrastructure projects like North-South Corridor, Changi Airport Terminal 5 and KL-Singapore High-Speed Rail (HSR) and a slew of enbloc projects looking to relaunch will drive demand for the services of construction companies. CIMB expects construction companies to ride on the demand to replenish their order books.

For investors looking for exposure to the construction sector, here are five small-cap construction plays you should know.

Investors Takeaway: 5 Small-Cap Construction Plays You Should Know

  1. Yongnam Holdings

yongnam
yongnam

Yongnam Holdings (Yongnam) is currently awaiting a potential order from Melbourne Metro, which Yongnam’s management is confident of securing. Given the lack of local capability for strut works, RHB believes that Yongnam has a high probability of securing the order to build its overseas track record.

On the local front, Yongnam is confident of clinching contracts for strut works on various stretches of the North-South Corridor (NSC). Among local players, Yongnam’s capacity for strut works exceeds the combined assets of its three closest competitors. If Yongnam clinches the strut works contract on NSC, it can help Yongnam regain its A1 grading for civil engineering from the Building Construction Authority.

  1. CSC Holdings

CSC Holdings (CSC) is a ground engineering solutions provider for residential, commercial, industrial and infrastructure projects in both the private and public construction sectors. Its list of prominent customers includes Marina Bay Sands, Housing Development Board and City Developments.

According to CSC, more contracts requiring foundation and geotechnical engineering works will come its way this year. This will help CSC to raise the quality of its orderbooks. CSC is expecting a significant uplift in its net margin as it continues to clear off profitable projects from its orderbooks. Moving forward, CSC is looking to build its orderbooks through the upcoming Punggol Digital District that will involve foundation works.

  1. Ley Choon Group Holdings

Ley Choon Group Holdings (Ley Choon) is a Singapore-based one-stop underground utilities infrastructure service provider. Its core business comprises of sewer pipeline rehabilitation, road and airfield construction and maintenance, asphalt premix production and construction waste recycling.

Ley Choon has a stable customer base which includes statutory boards like Public Utilities Board (PUB) and companies like Changi Airport Group and PowerGas. Amid the backdrop of healthy construction demand in the public sector thanks to upcoming mega infrastructure projects, Ley Choon has a good chance of building its orderbooks for future growth.

  1. Soilbuild Construction Group

soilbuild
soilbuild

Soilbuild Construction Group is a leading builder with a long and successful track record of constructing residential and business space properties. It has over 40 years of experience in Design and Build, Construction, Turnkey Construction, Project Management Consultancy, Procurement and Mechanical & Electrical Installation.

Soilbuild Construction is set to ride on the regulatory change of greater adoption of Design for Manufacturing and Assembly (DfMA). By 2019, all public housing will have its major components built with the Prefabricated Prefinished Volumetric Construction (PPVC) method. Soilbuild Construction has built an Integrated Construction and Prefabrication Hub (ICPH) in Singapore to cater to Singapore’s public housing needs.

  1. TA Corporation

TA Corporation is a property and construction company with more than 40 years of experience. It has built a strong reputation as a developer of quality, well-located residential developments that target the middle-to-upper-middle markets. Given its reputation, TA Corporation has the ability to undertake a wide spectrum of projects for both public and private sector clients.

Its list of reputable clients includes Housing and Development Board and CapitaLand. TA Corporation also has a good exposure to the fast-growing distribution business in Myanmar. Its subsidiary is the exclusive distributor of the ‘Continental’ brand of passenger & light truck tyres in Myanmar and the sole distributor of ‘Shell’ lubricants.