Company Coverage
Soon Hock Enterprise (SHOCK SP): 1H26: Robust Development Pipeline Supports Growth
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.59
S$0.66
+11.9%
S$0.71
Analyst
Highlights
- SHE reported 1H26 PATMI of S$19.3m, missing our expectation due to higher-than-expected expenses, forming 41% of our full-year forecast.
- Skye@Tuas remains the key near-term earnings driver, with full TOP expected by 1H27, supporting earnings through 2027.
- Maintain BUY with a lower target price of S$0.66, pegged to a lower 1.1x 2026F P/B.
Analysis
1H26 revenue ahead, while earnings below expectations. Soon Hock Enterprise (SHE) reported 1H26 revenue of S$142.6m (-37.0% hoh) and net profit of S$19.3m (-50.9% hoh), representing 56% and 41% of our full-year forecasts respectively. Revenue was driven by S$140.7m of property development revenue following the recognition of sales from Stellar@Tampines upon obtaining final temporary occupation permit (TOP) in Feb 26. The hoh decline reflects the larger revenue and profit contribution from the project in 2H25. On a hoh basis, earnings were weighed down by higher sales commissions and administrative expenses, resulting in a lower 13.5% net profit margin (2H25: 17.4%). Gross margin of 31.3% was also below expectations, mainly due to the shift towards lower-margin property development revenue compared with higher-margin factory renewal.
Skye@Tuas is the key near-term earnings driver. Sales for the 312-unit development commenced in 2Q26, with construction progressing as planned. Strategically located next to Tuas Link MRT station and close to Tuas Mega Port and Tuas Checkpoint, the project should attract demand from logistics and industrial users seeking strong transport connectivity. Full TOP is expected by 1H27.
Highlights
- SHE reported 1H26 PATMI of S$19.3m, missing our expectation due to higher-than-expected expenses, forming 41% of our full-year forecast.
- Skye@Tuas remains the key near-term earnings driver, with full TOP expected by 1H27, supporting earnings through 2027.
- Maintain BUY with a lower target price of S$0.66, pegged to a lower 1.1x 2026F P/B.
Analysis
1H26 revenue ahead, while earnings below expectations. Soon Hock Enterprise (SHE) reported 1H26 revenue of S$142.6m (-37.0% hoh) and net profit of S$19.3m (-50.9% hoh), representing 56% and 41% of our full-year forecasts respectively. Revenue was driven by S$140.7m of property development revenue following the recognition of sales from Stellar@Tampines upon obtaining final temporary occupation permit (TOP) in Feb 26. The hoh decline reflects the larger revenue and profit contribution from the project in 2H25. On a hoh basis, earnings were weighed down by higher sales commissions and administrative expenses, resulting in a lower 13.5% net profit margin (2H25: 17.4%). Gross margin of 31.3% was also below expectations, mainly due to the shift towards lower-margin property development revenue compared with higher-margin factory renewal.
Skye@Tuas is the key near-term earnings driver. Sales for the 312-unit development commenced in 2Q26, with construction progressing as planned. Strategically located next to Tuas Link MRT station and close to Tuas Mega Port and Tuas Checkpoint, the project should attract demand from logistics and industrial users seeking strong transport connectivity. Full TOP is expected by 1H27.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.59
S$0.66
+11.9%
S$0.71
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at the following link: this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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