Soilbuild Construction Group: Landmark win priced in

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Soilbuild Construction Group: Landmark win priced in

one-off as such projects are typically awarded to larger, more experienced foreign contractors. With the stock up c700% since the PSA win announcement in Jun'24, we believe much of the optimism is dissemination research

already priced in, leaving limited scope for further re-rating as earnings normalize. of

theEVIDENCE Our benchmarking indicates no Singapore contractor has consistently maintained 10%+ EBIT report

margins over the long term. Moreover, we believe much of the recent margin expansion reflects the current industry upcycle, where contractors are now able to temporarily price higher in the medium report. which

term. Channel checks also suggest that a high-single-digit GPM is considered a reasonable target for A

industrial projects vs Soilbuild's almost 16% in 2025. means

WHAT´S PRICED IN? LSEG consensus is expecting sustained order book strength beyond the landmark S$648mn PSA that description project, reflected in expectations for +12% YoY revenue growth in 2027e. We think this is too of UBS

optimistic, given that the bulk of PSA revenue will be recognized in 2026e, with only c20% remaining

in 2027e. In addition, we believe other PSA projects available for tender are currently smaller. this

Soilbuild has only announced S$158mn of new contracts in H126, suggesting a potentially more challenging path to replenish its order book. Securities

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Upside/Downside arrangement Ltd

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21.

compensation Valuedrivers Order book growth GPM (ex D&A) EBIT margins Capex % Revenue either

50mn higher across

S$0.91 upside 12-18.5% 5-12.6% 1.5-2%

forecast S$458mn, S directly

S$0.68 base $525mn, S$400mn 11.5-17.5% 2.9-11.5% 2-2.5% or

2026-28e

50mn lower across