Boustead Projects Limited (SGX: AVM), or BPL, is a leading real estate solutions provider, with engineering expertise in design and build projects for multinational companies. To date, the group has constructed and developed more than three million square metres of real estate in Singapore, China, Malaysia, and Vietnam. BPL is a 53%-owned subsidiary of Boustead Singapore Limited (SGX: F9D) or BSL.
BPL was spun off from BSL back in 2014 as a separately-listed entity in order to pursue its own growth plans. Over the years, BPL has evolved and transformed itself into a leader in industry 4.0 standards and has equipped itself with the latest technologies for sustainable development and construction.
Its recently-completed industrial building ALICE @ Mediapolis is a testament to its abilities, as the building employs the latest technologies and methodologies. The property was awarded the Green Mark Platinum by the Building and Construction Authority (the highest eco-sustainability rating).
Here are three compelling reasons why investors should include BPL in their investment portfolios.
1. Burgeoning order book
BPL has, in the past fiscal year, clinched two major contracts each worth more than S$200 million. This has caused its order book to swell to S$621 million as of 30 June 2019, which is a level much higher than in prior years (when the average was around S$200 million in total).
This is unprecedented in the history of BPL as it has never clinched a project of this size before. To recap, BPL had won an S$241.9 million contract for a multi-storey recycling facility in December 2018. One month later, BPL secured a contract worth over S$200 million for Surbana’s Jurong campus in Singapore.
2. Enhanced capabilities
Management has ensured that the group employs the latest technologies and has the best capabilities within the industry. This places BPL at the forefront of innovation and their market-leading techniques puts them well ahead of the competition. These enhanced capabilities not only save time and effort but also reduce overall costs by employing advanced technologies such as integrated digital delivery (IDD), virtual design and construction (VDC) and 7D Building Information Modelling (BIM).
These capabilities will stand BPL in good stead to bid for future large contracts as it has shown that it has the necessary skill sets and track record.
3. Unlocking value from real estate portfolio
A key catalyst for investors would be the unlocking of value from BPL’s growing real estate portfolio. As of 31 March 2019, the group has 24 wholly-owned and jointly-owned properties spanning a total of 370,000 square metres. The projected total market valuation of the properties will surpass S$1 billion once all the properties are completed (five are still under construction).
These properties are currently reflected in the balance sheet at cost less accumulated depreciation and do not reflect the latest market values as appraised by independent market valuers. Management and the Board are now reviewing options to monetise the value of the leasehold portfolio, but no concrete plans have been announced yet.
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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of Boustead Singapore Limited and Boustead Projects Limited. Motley Fool Singapore contributor Royston Yang owns shares in Boustead Singapore Limited and Boustead Projects Limited.
Motley Fool Singapore 2019