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Furthermore, construction demand is expected to recover to $23.0 billion to $28.0 billion in 2021 recovering from the $21.3 billion for 2020, and Chua believes that BRC Asia’s leadership position in the reinforced steel industry is best positioned for a construction sector recovery.
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The group’s final dividend for FY2020 fell 60% vs. FY2019 as earnings declined 36% due to headwinds in the construction industry last year. Despite this, the group still declared a special dividend of four Singapore cents for FY2020, translating to a payout ratio of about 68% (up from 59% for FY2019). Chua concluded by saying that he is positive on the outlook of the construction industry post circuit-breaker. As construction activities resume, demand for construction materials is expected to increase, leading to a re-rating of BRC Asia’s shares.