Company Update: 16 October 2025
Robust order book and BuildTech upside drive medium-term growth
- Robust orderbook. As of 27 August 2025, ISOTeam’s order book expanded to S$181.1mn, up from S$161.9mn as of 30 June 2025, providing clear revenue visibility through FY27. The Group remains well-positioned to capture recurring demand from public-sector upgrading, sustainability retrofits and infrastructure enhancement projects.
FY25 results disappoint but contract wins remain bright spot.
ISOTeam’s FY25 performance reflected near-term project delays, with revenue falling from S$130.2mn in FY24 to S$119.2mn in FY25. NPAT declined to S$5.1mn from S$6.5mn as activity in the Repairs & Redecoration (R&R) and Coating & Painting (C&P) segments slowed. Gross profit also declined 5.3% YoY to S$19.1mn. However, gross margin improved to 16.0%, supported by better cost management. Encouragingly, contract wins in 1H26 provide a strong base for recovery, the Group secured S$20.9mn in July 2025 and S$22.5mn in August 2025, boosting the order book to S$181.1mn, to be progressively recognised over 24 months.
Structural tailwinds underpin growth visibility.
ISOTeam is well-positioned to benefit from Singapore’s robust construction cycle and long-term sustainability policies. Its core R&R and A&A businesses align with recurring public programmes such as the Home Improvement Programme (HIP) and Neighbourhood Renewal Programme (NRP). The Ministry of National Development (MND) has committed to launching 55,000 BTO flats during 2025-2027, up 10% from prior plans. Meanwhile, the Building and Construction Authority (BCA) projects total construction demand at S$35bn-39bn in 2025, exceeding pre-pandemic levels.
Valuation & Action
We reiterate our OUTPERFORM call and lower our 12-month TP to S$0.099 based on DCF methodology (terminal growth: 1.8%, WACC: 7.2%). The recent share placement expands capital capacity for growth, while the lower interest rate environment offsets the slight dilution impact. With over 80% of revenue derived from public-sector projects and an expanding portfolio in green and sustainability-linked works, ISOTeam’s earnings profile remains defensive and visible. Over the medium term, we expect margin expansion from BuildTech adoption and steady earnings growth supported by the Group’s strong order book. Our target price implies an 8.0% potential upside from current levels
Risks
Macroeconomic slowdown, margin pressure due to competition and lower-than-expected new order wins.
