Summary:
Following its fast-tracked upgrade from the SGX Catalist board to the SGX Mainboard on 16 July because of an exceptional margin-led profit surge in 1H26, LCC’s order book has grown to a healthy S$141.7mil as the urban revitalisation specialist won orders in diversified construction segments such as a new MRT station.
Compared with the year earlier figure of S$112.8mil (30 June 2025), the order book is 26% bigger and shorter dated and at ~1.4x FY26 revenue versus about 1.0x a year earlier, will support both FY27 revenue above FY26’s S$101.6mil and sustain FY27 gross margins > 30%.
At S$0.30 the stock trades on 10.3× FY27F PE, and the generous payout ratio of 65% in FY26 is well above the 30% commitment made at IPO.
We initiate coverage of LCC with a BUY and target price of S$0.36, 20% above the current S$0.30. At the current share price of S$0.30, the dividend yield is 7.5%. Key risks are margin sustainability: LCC’s 35% + gross margin in FY26 is high for the construction industry though RHTC sees it staying > 30% in FY27.
