(HATT SP / WYO.SI)
Breaking Ground on the Next Growth Phase
Construction
Metrocon’s foundation engineering capabilities position it to capture opportunities across public housing, infrastructure and institutional developments. Its established project track record and main-contractor relationships support contract acquisition, while the planned BCA CR08 upgrade from L5 to L6 could broaden direct public-sector tender opportunities.
Outstanding piling and groundwork contracts stood at approximately S$85.25 million as at 15 June 2026, equivalent to 1.4 times FY2025 revenue, with execution expected over the following 24 months. Third-party orders represented 83.6% of the backlog, indicating potential to broaden the customer base from FY2025, when LBD Engineering contributed 64.1% of revenue.
FY2025 revenue increased 67.5% to S$61.07 million, while gross margin expanded to 11.4% from 6.7% and administrative expenses remained broadly stable, lifting net profit to S$4.20 million. Expansion into ground improvement, earthworks and soil disposal offers additional growth opportunities, with sustainable earnings dependent on disciplined execution, cash collection and control of expansion costs.
We initiate coverage on Metrocon Holdings Limited with an OUTPERFORM rating and a 12-month target price of S$0.28. Our target price implies upside of 21.74% from current levels.
Key downside risks include (i)Operational risks, (ii)Market and macroeconomic risks, (iii) Input-cost and resource risks, (iv)Customer and related-party risks, (v)Working-capital and credit risks, (vi)Regulatory, safety and environmental risks, and (vii)Expansion and earnings-normalisation risks.
