Contract awards saw significant growth, with 3Q24 and 9M24 wins up 55% and 34% YoY, respectively.

Construction output in FY24 is expected to reach the upper end of the Building and Construction Authority's (BCA) forecast of $34b to $37b, CGS International (CGSI) said.

It said Singapore's construction landscape remains robust, with construction output rising 8% YoY for the first nine months of 2024, driven by a strong pipeline of public sector projects.

Meanwhile, CGSI noted BRC's robust performance in its 2HFY9/24 report, citing higher-than-expected dividends of 14 Singapore cents, which brought the FY24 total DPS to 20 cents, up from 16 cents in FY23.

While offtake volumes were slower than expected due to engineering and architectural bottlenecks, CGSI said underlying construction demand remained strong as of November 2024.

It also observed significant growth in contract awards, with 3Q24 and 9M24 wins up 55% and 34% YoY, respectively.

Looking ahead, CGSI anticipates the 2025 project pipeline to be bolstered by mega-infrastructure projects like Changi Airport Terminal 5, Tuas Mega Port, expanded public housing supply, and rail projects such as the Cross Island Line.

On M&A opportunities, CGSI highlighted that BRC and Pan-United (PanU) have significantly strengthened their balance sheets through deleveraging, creating room for potential acquisitions.

CGSI maintains a positive outlook on BRC, highlighting its attractive FY25F dividend yield of 8.2% and a reasonable valuation of 8.5x CY25F P/E.