Boustead real estate division led growth.

Target price: SGD1.14

Results within expectations. Boustead Singapore reported FY3/12 revenue of SGD408.7m (-27%, YoY) with net profit of SGD55.6m (+6% YoY). Results were largely in line if gains on disposal of investment properties and subsidiaries totaling SGD12.1m were excluded. As expected, 4QFY3/12 came in stronger after three preceding weak quarters due to slow revenue recognition. Final dividend of 3 cts/share was declared, bringing total dividends to 5 cts/share implying a yield of 5.8%. Maintain BUY and target price of SGD1.14.

Real estate division led growth. The Real Estate division was the largest revenue contributor at 33% of total turnover. Energy-related Engineering division saw delays in recognition of major projects due to supply chain disruption caused by the flooding in Thailand, resulting in a 11% YoY fall in revenue. Its Water and Wastewater Engineering segment was marginally profitable on
SGD40m of revenue. Lastly, the Geo-spatial Technology division delivered strong growth of 14% YoY, surpassing the SGD100m revenue mark for the first time.

Strong contract wins. For FY3/12, Boustead secured the second highest level of contracts wins in seven years. This should yield positive results going forward. It also secured a major water and wastewater engineering contract from Sembcorp Industries last week, which we estimate to be worth SGD29m. Current orderbook stands at SGD337m, with healthy enquiry pipeline across all divisions. Its industrial leasehold portfolio has also increased to 107,000 sqm with the recent addition of a 20,020 sqm contract from Jabil Circuit.

Deeply undervalued. Boustead has maintained its strong financials with net cash of SGD170.5m, making up 39% of its market cap. It intends to use this to grow its leasehold portfolio to build on recurring revenue and also for potential acquisitions in the current depressed market. Despite trading at ex-cash FY3/13F PER of only 4.6x with 5.8% yield, the stock remains deeply undervalued in our opinion. Maintain BUY and SOTP-based target price of SGD1.14.