• For about 20 years, ISOTeam was a steady, reliable business, mostly handling regular jobs to keep Singapore’s public spaces -- like HDB block facades and hawker centres -- looking good and running smoothly. |
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Area |
Recent Highlights |
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Financials |
1H25 net profit up 36.5% YoY; revenue up 4.2% YoY; margin expansion to 15.1% |
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Order Book |
S$188.7 million as of Feb 2025, supporting activities through FY2029 |
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Technology |
Commercialising facade-cleaning/painting drones; AI-driven spray-painting trials in 2025 |
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Sustainability |
Expanding solar installations, cool coatings, and eco-retrofitting under national green initiatives |
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Dividend Policy |
Revised to distribute at least 30% of net profit (excluding one-offs). |
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Market Focus |
80% revenue from public sector; strong recurring demand in maintenance and upgrading |
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Analyst Sentiment |
Target price upgrades; positive outlook on earnings and growth |
Excerpts from KGI report
Analyst: Alyssa Tee
| • Strong profit recovery and margin expansion. ISOTeam posted a robust 1H25, with net profit rising by 36.5% YoY to S$1.9mn. Revenue grew by 4.2% YoY to S$65.4mn, underpinned by stronger contributions from the A&A segment. Gross profit climbed by 18.4% YoY to S$9.9mn, with the margin expanding to 15.1%, up from 13.3%, sustaining healthy pre-pandemic levels • Robust and diversified order book. As of February 2025, ISOTeam’s outstanding order book stood at S$188.7mn, providing clear revenue visibility through FY29. The Group is well positioned to capture recurring demand from upgrading, sustainability retrofits, and infrastructure enhancement projects. • Technology driven productivity gains. ISOTeam is on track to commercialise autonomous facade cleaning and painting drones by end-2025 via ISOTeam BuildTech.  With 18 drones targeted and Civil Aviation Authority of Singapore (CAAS) permits pending, this first-mover advantage is set to enhance efficiency and reduce labour reliance in maintenance works. • Attractive dividend prospects. Management has guided a minimum 30% of net profit after tax dividend policy for FY25, up from 25% in FY24, reflecting confidence in sustained earnings recovery and a robust project pipeline. The FY24 final dividend of 0.08 Scents per share underscores the Group’s commitment to enhancing shareholder returns in tandem with profit growth. • We initiate an OUTPERFORM recommendation with a 12- month target price (TP) of $0.100. |
Structural tailwinds underpin multi-year growth visibility. ISOTeam is well-positioned to capitalise on Singapore’s sustained public sector upgrading and green initiatives.
Its core Repairs & Redecoration (R&R) and Addition & Alteration (A&A) services align with recurring programmes like the Home Improvement Programme (HIP), Neighbourhood Renewal Programme (NRP) and the planned launch of over 50,000 BTO flats from 2025-2027.
These works, typically recurring every five to ten years, underpin long-term revenue visibility.
ISOTeam has also expanded into sustainability-linked projects, such as solar installations with Singapore’s 2 GWp by 2030 target. Its Coating & Painting (C&P) segment also supports HDB initiatives to mitigate the Urban Heat Island (UHI) effect through heat-reflective coatings.
The Group’s early adoption of robotics, drones, and AI-powered painting solutions enhances productivity and mitigates labour constraints.
Backed by its robust order book, ISOTeam offers clear earnings visibility and sustained multiyear growth potential.
We initiate coverage on ISOTeam Ltd with an OUTPERFORM rating and a 12-month TP of S$0.100, based on a Discounted Cash Flow (DCF) valuation, assuming a terminal growth rate of 2.0% and a WACC of 7.5%.  Alyssa Tee, analystISOTeam’s dominant position in public sector upgrading, which contributes over 80% of revenue, coupled with expanding exposure to green projects, underpins resilient cash flows and long-term growth.With a healthy balance sheet, robust project pipeline, and increasing productivity from digitalisation, we expect steady earnings growth and margin expansion over the medium term. Our target price implies a potential upside of 31.8% from current levels. Risks: Macroeconomic slowdown, margin pressure due to competition and lower-than-expected new order wins. . |
Full report here