(ATTIKA SP / 53W.SI)
Margins hold; property upside stays outside the base case
Industrials
Revenue was broadly flat at S$19.2m, but gross profit rose 13.3% and gross margin expanded 2.5ppt to 20.9%. PATMI increased 11.7% to S$1.9m despite a 55.7% decline in other income, which makes the improvement more operationally grounded than the top line suggests.
1H26 delivered 35.0% of our S$54.9m revenue estimate and 36.3% of our S$5.2m PATMI estimate. The implied 2H26 requirement is S$35.7m of revenue and S$3.3m of PATMI; the disclosed award pool supports visibility, while project phasing, certification and cash collection remain the proof points.
Tagore Lane, Vision Exchange and the newly acquired Gemini @ Sims unit can support storage, training, site operations, a showroom, rental income or future monetisation. We include the S$2.0m 1H26 capex but assign no incremental property value until management discloses use, funding, rent, disposal proceeds or development returns.
We reiterate OUTPERFORM with a DCF-based TP of S$0.308, down from S$0.312. The change is principally the present value of S$2.032m of FY26 capex; the post-buyback 269.482m share count is a small offset. At S$0.200, our TP implies 54.2% upside.
Project delays or margin leakage; award replenishment; slower cash conversion; higher-for-longer interim net debt; property capital deployed without measurable returns; customer concentration and low trading liquidity.
