Stock Analysis: BRC Asia | Lianhe Zaobao
BRC Asia recommends buying, with a target price of 4.69 yuan and a current market price of 4.41 yuan. The company holds a 55% to 60% share in the steel market, benefiting from construction activities. The government has allocated 19.6 billion yuan for infrastructure spending in the 2025 budget. BRC Asia has secured a contract for the underground structure of Changi Airport T5 worth nearly 570 million yuan, with an order value of 2 billion yuan, which is 35% higher than the revenue for the fiscal year 2024. Additionally, by acquiring a 55% stake in Southern Steel Mesh, BRC Asia will diversify its revenue sources and expand its scale in Southeast Asia
BRC Asia
- Recommendation: Buy
- Target Price: 4.69 CNY
- Market Price: 4.41 CNY (−0.23%)
BRC Asia holds a market share of 55% to 60% in China's steel market, making it one of the main beneficiaries of the booming construction activities. The government has allocated 19.6 billion CNY for infrastructure spending in the 2025 budget, covering areas such as transportation, medical facilities, industry, and housing.
On July 14 this year, BRC Asia secured a contract for the underground structure of Changi Airport's Terminal 5 worth nearly 570 million CNY, which is the company's largest single order to date. The total order value has reached a new high of 2 billion CNY, which is 35% higher than the revenue for the fiscal year 2024, with most expected to be completed within the next three years.
Further Reading
Stock Commentary: Singtel Stock Commentary: Yangtze River Shipbuilding
Additionally, by acquiring a 55% stake in the rebar supplier Southern Steel Mesh, the company can establish a strategic foothold in Malaysia, diversify its revenue sources, and expand its scale in Southeast Asia.
Maintain "Buy" rating, target price 4.69 CNY. (UOB Kay Hian)
