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ISOTeam - DBS Research 2016-07-15: Sprucing up HDB estates

ISOTeam - DBS Research 2016-07-15: Sprucing up HDB estates ISOTEAM LTD 5WF.SI 

ISOTeam - Sprucing up HDB estates

  • A Facilities Maintenance Specialist in Singapore’s public sector.
  • Growth driven by upgrading projects in Singapore and new business in Myanmar.
  • Fair value of S$0.35 based on 10x FY17F PE.



The Business.


Specialist in building maintenance and estate upgrading industry. 

  • ISOTeam was founded in 1998 and has more than 15 years of Repairs & Redecoration (R&R) and Addition & Alteration (A&A) track record in upgrading, retrofitting and maintenance of estates in Singapore. It has undertaken more than 300 public and private sector R&R and A&A projects involving close to 3,000 buildings. 
  • ISOTeam is also the exclusive applicator of paint works for both SKK and Nippon Paint in the public housing sector in Singapore.

Government estate upgrading and Myanmar to drive growth. 

  • Growth is dependent on the government’s initiatives to reshape the landscape of public housing, amenities and towns in Singapore including Neighbourhood Renewal Programme (NRP). 
  • As one of the largest integrated specialist A&A and R&R service providers, we believe ISOTeam enjoys economies of scale in its resources and is able to bid for projects more competitively than its smaller rivals. 
  • Newly incorporated JV with Nippon Paint in Myanmar will be able to tap growth potential in infrastructure development and construction activities there.


The Stock


Stock's fair value at S$0.35 based on PE. 

  • Our TP of S$0.35 is based on 10x FY17F earnings. 
  • We note that ISOTeam is a growth company that has the potential to expand quickly especially with its new JV business with Nippon Paint in Myanmar. 
  • We believe our 10x valuation peg is modest as PEG is inexcessive at 0.8x.


Return *: 2
Risk: Moderate
Potential Target * : 12-Month S$ 0.35 (12% upside)



Alfie YEO DBS Vickers | http://www.dbsvickers.com/ 2016-07-15
DBS Vickers SGX Stock Analyst Report NOT RATED MAINTAIN NOT RATED 0.35 Same 0.35

*This Equity Explorer report represents a preliminary assessment of the subject company, and does not represent initiation into DBSV’s coverage universe. As such DBSV does not commit to regular updates on an ongoing basis. The rating system is distinct from stocks in our regular coverage universe and is explained further on the back page of this report.



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