Company Update: 17 March 2026
Record order book supports multi-year earnings visibility
- FY25 earnings beat driven by Guthrie Engineering consolidation. Revenue rose 43% YoY to S$106.7mn, while net profit surged 85% to S$16.6mn as Guthrie Engineering’s results were consolidated from 1 July 2025. Gross profit margin expanded 380bps to 18.7%, reflecting a higher-margin project mix. Notably, 2H25 net profit of S$11.9mn alone surpassed the S$4.7mn from 1H25, highlighting the earnings accretion from the acquisition.
Strong Balance Sheet And Enhanced Shareholder Returns
The Group maintains a solid financial position following the acquisition. As of 31 December 2025, Ever Glory held cash and cash equivalents (including fixed deposits) of S$42.9mn, while net working capital improved to S$43.7mn from S$14.9mn in FY24.Net gearing remains manageable at approximately 0.5x, with the principal new liabilities comprising the S$25.1mn acquisition loan for Guthrie Engineering and the S$5.0mn convertible bond (8% coupon, conversion window 2-8 April 2026).Reflecting the Group’s strengthened earnings profile, the Board has proposed a final tax-exempt dividend of 1.0 cent per share for FY25 (FY24: 0.25 cents), representing a 300% increase and reaffirming management’s commitment to improving shareholder returns.
Structural Tailwinds Underpin Order Book Growth
Ever Glory is well-positioned to benefit from Singapore’s robust construction upcycle and sustained public infrastructure investment. Its integrated M&E capabilities align with large-scale institutional, healthcare, and mixed-use developments driving near-term tender activity. The Ministry of Health has committed to adding 13,600 hospital beds by 2030, with six to seven Integrated General Hospital contracts expected over the next two to three years. Meanwhile, the Building and Construction Authority (BCA) projects total construction demand at S$47-53bn in 2026, with medium-term demand forecast to average S$39-46bn annually through 2030.
Valuation & Action
We raise our target price to S$1.28 (prev. S$1.20), based on DCF valuation (WACC: 6.91%, terminal growth: 1.5%), and maintain OUTPERFORM. The successful integration of Guthrie Engineering has structurally re-rated the Group’s earnings profile in FY25. Backed by a record S$732.8mn order book diversified across healthcare, hospitality, and public infrastructure, EGU’s revenue is highly visible through 2028. The Mainboard transfer completed in 2025 broadens EGU’s investor base and underpins a re-rating of its valuation multiple. Over the medium term, we expect earnings growth to remain strong, supported by Singapore’s strong construction demand pipeline of S$47-53bn in 2026. Our target price implies approximately 72% upside from current levels.
Risks
Challenges in project delivery, cost inflation eroding margins, intense tender competition affecting new order wins, regulatory changes and slowdown in project rollouts.
