Excerpts from analyst's report

RHB Research analyst: Jarick Seet

HDB sunseapHuge potential for ISOTeam to clinch more installation contracts from Sunseap which has won a tender to supply solar panels to 831 HDB blocks and eight Ministry of Home Affairs and Public Utilities Board sites by the end of 2017. Photo: Sunseap
ISOTeam has secured a contract from Sunseap worth SGD1.8m to install Grid-Tied Solar Photovoltaic Systems on the roofs of 33 blocks at Tampines Street and Avenue 9. This marks the Group’s first foray into the renewable energy installation sector.

We think that this is a huge positive for ISOTeam which not only compliments the company’s skillset but provides them with a whole new business segment to venture into, with Sunseap having to supply 831 HDB blocks by 2017.

Maintain BUY with a DCF-backed SGD0.82 TP (34% upside). 



First foray into renewable energy installation sector.
ISOTeam has secured a contract from Sunseap worth SGD1.8m to install Grid-Tied Solar Photovoltaic Systems on the roofs of 33 blocks at Tampines Street 32, 42, 43, 44 and 45 and Avenue 9. This marks the Group’s first foray into the renewable energy installation sector.

We think that this is a huge positive for ISOTeam as it not only compliments the company’s skillset but also provides them with a whole new business segment where they can venture into.


JarickSeet11.14Strong orderbook.  ISOTeam has a strong track record in replenishing its orderbook, especially post elections. Its current orderbook stands at an estimated SGD80m to SGD85m despite already delivering about SGD30m to SGD35m worth of projects in the first four months of FY16. These projects will progressively be realized over the next 2 years.

"We believe that this should provide good earnings visibility into 2016 and 2017, and is a reflection of the market’s belief in its proven track record."
-- Jarick Seet (photo)

Huge potential ahead. Sunseap has recently announced that they have won a tender to supply solar panels for 831 Housing Development Board (HDB) blocks and eight Ministry of Home Affairs and Public Utilities Board sites by the end of 2017.

Due to the number of the HDB blocks involved over a relatively short period, we understand that if ISOTeam delivers on its initial contract without any hassle, we are of view that they are likely to be able to get more similar contracts from Sunseap.

This represents a huge potential for ISOTeam. Assuming that they can complete 200 blocks of HDB a year, it will work out to an additional SGD12m topline pa for the next 2 years.

Expanding into Myanmar by 2016. We understand that ISOTeam will be expanding into Myanmar with the help of its substantial shareholder and strategic partner, Nippon Paint by the end of 2015.

Currently, ISOTeam is the exclusive applicator for painting works in the HDB and town council sector for both SKK and Nippon Paint Singapore.

We think that there could be a high possibility of a similar arrangement overseas with Nippon Paint – which would be a key leap forward for ISOTeam’s expansion out of Singapore.


Full report here.

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