EGUH SP / ZKX.SI
Record half and a S$1bn order book; Hong Kong listing in motion
Industrials
Revenue tripled (+200.1% YoY) to S$103.2mn, driven by the full six-month consolidation of Guthrie Engineering (GE) and steady progress on healthcare, transport, utilities and commercial M&E contracts. PATMI rose 177.5% to S$12.7mn; excluding S$1.4mn of one-off SEHK listing expenses, adjusted PATMI rose 208.1% to S$14.1mn. 1H26 revenue and PATMI represent 48% and 62% of our FY26F respectively.
Gross margin eased only modestly to 20.8% (1H25: 21.9%) despite a tripling of volume. Operating cash flow swung to an inflow of S$18.9mn (1H25: outflow of S$0.1mn), funding S$13.7mn of GE acquisition payments and the S$4.0mn FY25 final dividend. Equity rose to S$72.4mn on retained profit and the bond conversion, while cash and fixed deposits of S$38.7mn exceed bank borrowings of S$24.4mn.
The order book rose from S$732.8mn at end-2025 to above S$900mn in May and above S$1.0bn in July 2026, after approximately S$400mn of new wins in 2026 to July, including LTA works, Resorts World Sentosa and EGU’s first defence infrastructure contract for DSTA. At about 4.7x our FY26F revenue, the backlog underpins our forecasts.
We maintain OUTPERFORM and raise our 12-month target price to S$1.17 from S$1.02 (our previous S$1.28 after adjusting for the 1-for-4 bonus issue). Our target price is based on a DCF valuation using a 6.95% WACC and a 1.5% terminal growth rate. The increase reflects the higher audited FY25 revenue base, a stronger-than-expected 1H26 and the S$1bn order book.
Key downside risks include (i) project delays and cost overruns on fixed-price contracts; (ii) material and manpower cost inflation; (iii) labour constraints on order-book conversion; (iv) weaker order wins beyond 2027; and (v) SEHK listing dilution.
