Soilbuild Construction - Revenue growth and margin expansion lift profits

Strong 2H25 earnings growth on higher revenue. 

2H25 revenue rose 33.6% year on year to S$317.9 million (2H FY2024: S$237.9 million). Gross profit climbed 56.7% to S$49.7 million, lifting gross margin to 15.6% from 13.3% a year earlier. Net profit rose 84.1% to S$35.3 million (2H FY2024: S$19.2 million), aided by stronger core profitability and lower finance costs.

Both construction and precast segments grew more than 30% in 2H25. 

Both core divisions grew strongly in 2H FY2025. Construction segment revenue increased 32.6% year on year to S$263.9 million, with management citing continued progress on key projects such as PSA Supply Chain Hub @ Tuas, Tuas South Avenue, Changi North, Tampines North, Loyang Way and the Ubi Transportation Hub. Precast also remained a meaningful contributor, with 2H FY2025 precast revenue of about S$52.3 million, up 34.7% year on year, reflecting higher product sales.

Balance sheet strengthened further. 

Soilbuild Construction ended FY2025 with a stronger balance sheet. Cash and cash equivalents increased to S$153.3 million as at 31 December 2025 (30 June 2025: S$58.4 million). Management also pointed to improved liquidity and leverage indicators, including an improved current ratio and a move into a net cash position.

Order book of S$1.07 billion provides revenue visibility. 

Looking ahead, Soilbuild Construction continues to have revenue visibility anchored by an order book of around S$1.07 billion as at end-December 2025 (including new orders secured since). Currently, Soilbuild Construction is actively tracking five to six tenders with an aggregate value exceeding S$1 billion, though it does not expect to win all of them. Tender sizes are typically in the S$100 million to S$350–400 million range.

Higher dividend year-on-year. 

Soilbuild Construction proposed a final dividend of S$0.025 per share, which would bring full-year dividend to S$0.045 per share. Adjusting for the 4-for-1 stock split on 14 Jan 2026, this would translate to a post-split total FY2025 dividend per share of S$0.01125. FY2025 dividend payout ratio rose to about 31.2%, up from 18.7% in FY2024.

Maintain BUY with target price of S$1.15 unchanged. 

Our DCF valuation yields a fair value of S$1.15 per share, implying 16.8% upside from the current price of S$0.99. The valuation is based on a 10.9% WACC, 11.3% cost of equity and 3.0% terminal growth. We maintain our BUY rating. Soilbuild Construction is currently trading at 9.9x 2026 P/E and 1.1% 2026 dividend yield. At S$1.15, this would imply 11.5x 2026 P/E and 1.0% 2026 dividend yield.

Key Risks. 

Key risks include project execution uncertainty, overreliance on a few large projects such as the PSA Supply Chain Hub, cyclical precast demand driven primarily by public housing launches, potential delays in major public-sector tenders, and ongoing credit risks linked to legacy Myanmar exposures.

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Related links:

• Soilbuild Construction share price and share price target
• Soilbuild Construction dividend history and forecast

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