Investing in the Foundations
If you live in Singapore, your daily commute is likely a journey through a forest of cranes and deep-blue hoarding. We watch the skeletal frames of new HDB flats rise for young families or envision the future halls of Changi Terminal 5, but we rarely ask: who makes the first dollar? Before the first slab is poured or the glass facade reflects the sun, someone must move the earth.
In the high-stakes world of infrastructure, the “first movers” are often the most overlooked. Reclaims Global (RGL) isn’t just a waste management firm; they are the essential engine at the very beginning of Singapore’s massive S$44.2 billion construction upcycle. The market is fundamentally ignoring a core truth about Singapore’s bedrock: you cannot build the future without digging into the past, and Reclaims is the company holding the shovel.
Takeaway 1: The “Unsexy” Business of Dirt is a Low-Risk Powerhouse
In investing, “unsexy” often translates to “essential.” Reclaims Global has cemented itself as a top-three player in Singapore’s earthworks and excavation sector. This isn’t just a service; it is a “chokepoint.” If the hole isn’t dug, the multi-billion dollar project stalls.
Being an early-stage player provides a massive competitive moat. While late-stage contractors often face completion risks or payment disputes as budgets tighten toward the end of a build, excavation is the non-negotiable first step. This “first-in” status means demand is front-loaded and the risk of project cancellation before the earthmover is paid remains remarkably low.
“Reclaims is one of Singapore’s top three players in earthworks and excavation. It plays a critical role in the early stage of construction projects, making its default risk extremely low.”
Takeaway 2: A Rare “Debt-Free” Anomaly in a Capital-Intensive Sector
The industrial sector is typically a playground for high leverage. Peers like Centurion and Isoteam often carry heavy gearing (55.4% and 62.0% respectively) to fund their operations. Reclaims Global, however, has achieved a “fortress balance sheet” that is a total anomaly in this space.
Following a strategic S7.8 million capital raise in October 2025—which was fully subscribed by institutional investors—the company has solidified a current net cash position of S18.5 million. This isn’t just a historical metric; it is “dry powder” that allows them to seize growth while their competitors are busy servicing bank interest.
| Key Financial Strength Metrics | 2026F (Projected) |
| Net Debt/(Cash) to Equity | -46.2% |
| Return on Equity (ROE) | 16.7% |
| Dividend Yield | 4.9% |
Takeaway 3: The “Invisible” 20% Discount
Despite its dominant market position and pristine balance sheet, Reclaims is trading at a significant 20% discount compared to its industry peers. At a forward PE of 8.7x for FY27, it sits well below the 12.4x of Pan-United or the 10.9x of BRC Asia, despite RGL boasting a superior ROE of approximately 17%.
This valuation gap represents a rare entry point. With a target price of S$0.56 and an implied upside of 38.3%, the stock is effectively “on sale” while it sits on the cusp of an earnings surge. As the market wakes up to its net cash strength—which accounts for nearly 30% of its market cap—this discount is unlikely to last.
“We believe Reclaims’ current valuation… is undervalued, given its high ROE of around 17%… and strong balance sheet with net cash of S$18.5m (around 30% of market cap). Initiate coverage with a BUY recommendation.”
Takeaway 4: Riding the $44 Billion Wave
Singapore’s construction demand reached S44.2 billion in 2024, shattering forecasts. This isn’t a temporary blip; it’s a multi-year super-cycle. Reclaims proved its momentum recently with a massive **S15.5 million contract win in November 2025** for earthworks and disposal.
This win isn’t just a number—it’s proof of delivery. With roughly 75% of its revenue derived from long-term projects, Reclaims offers “multi-year earnings visibility” that is rare for a small-cap player. They aren’t just hoping for work; they are already booked through the upcycle.
Specific Catalysts for Growth:
- National Infrastructure: Massive earthworks required for Changi Terminal 5 and the Tuas Mega Port developments.
- Public Housing: Sustained demand from the aggressive expansion of HDB developments across the island.
- Institutional Wins: A steady pipeline of large-scale public sector institutional and redevelopment projects.
Takeaway 5: The Dividend Consistency Secret
For a company projecting a three-year earnings CAGR of 8% (FY25–28), you wouldn’t expect a high payout. Yet, Reclaims has maintained a rock-solid track record, paying 1.2 S cents in total dividends for both FY24 and FY25.
This translates to a 5% dividend yield, a rare find for a growth-oriented industrial firm. In a sector where cash is usually lumpy and unreliable, this payout is a powerful signal from management: the cash flow is stable, the debt is gone, and the shareholders are the priority.
Conclusion: The Foundation of Your Portfolio?
As Singapore redefines its skyline, the “unsexy” business of moving dirt has become the most strategic play on the board. Reclaims Global offers a unique combination of high-margin “chokepoint” services, a debt-free fortress balance sheet, and a 38.3% valuation upside. It is the literal foundation of the construction upcycle, currently priced at a significant discount.
Final Thought: In a market often obsessed with high-tech growth and intangible digital assets, is the most stable path to profit actually buried in the very ground beneath our feet?
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