Company Coverage
Lum Chang Creations (LUCC SP): FY26: Strong Margin Expansion; Top-line Weakness Due To Timing
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.32
S$0.46
+43.8%
S$0.51
Analyst
Highlights
- LCC reported FY26 earnings of S$22.3m (+72% yoy), slightly below our estimate of 97% due to a project timing and mix impacting top-line.
- LCC declared a final dividend of 1.0 S cent/share, bringing the total dividend payout to about 2.24 S cents/share over an enlarged share base.
- Maintain BUY with a 10% lower target price of S$0.46 (S$0.51 previously), pegged to an unchanged 13x 2027F PE.
Analysis
FY26 earnings supported by margin expansion. Lum Chang Creations (LCC) reported FY26 earnings of S$22.3m (+72% yoy), slightly below our estimate at 97% due to a weaker 2H26 top-line. FY26 revenue came in at S$101.6m (-11% yoy), representing 80% of our full-year forecast, largely due to project timing and mix. This weakness was offset by higher margin projects, lifting gross margin by 15.8ppt to 35.5% in FY26. Net margin improved by 10.5ppt to 21.9%, partially offset by higher staff and listed company costs.
Final dividend declared. LCC declared a final dividend of 1.0 S cent/share, following the company’s recent placement and bonus issue. This brings the total dividend payout to about 2.24 S cents/share using the current enlarged share base of 660m, and represents a payout ratio of around 65%. We expect dividend payout to remain strong going forward at 60%, implying a 7.4% dividend yield for 2026, supported by a net cash position of S$32.0m.
Strong orderbook continues to drive momentum. LCC maintained a healthy orderbook of approximately S$142m as at end-Aug 26, supported by key FY26 wins including the S$31.9m Registries of Civil and Muslim Marriages Building redevelopment, S$31.5m Orchard Road Presbyterian Church, and S$21.7m Covenant Evangelical Free Church. The orderbook also included the recent S$32.9m contract in Jul 26 for architectural and associated works at Teck Ghee Station. Collectively, these projects provide the group with strong revenue visibility over the next 2-3 years.
Highlights
- LCC reported FY26 earnings of S$22.3m (+72% yoy), slightly below our estimate of 97% due to a project timing and mix impacting top-line.
- LCC declared a final dividend of 1.0 S cent/share, bringing the total dividend payout to about 2.24 S cents/share over an enlarged share base.
- Maintain BUY with a 10% lower target price of S$0.46 (S$0.51 previously), pegged to an unchanged 13x 2027F PE.
Analysis
FY26 earnings supported by margin expansion. Lum Chang Creations (LCC) reported FY26 earnings of S$22.3m (+72% yoy), slightly below our estimate at 97% due to a weaker 2H26 top-line. FY26 revenue came in at S$101.6m (-11% yoy), representing 80% of our full-year forecast, largely due to project timing and mix. This weakness was offset by higher margin projects, lifting gross margin by 15.8ppt to 35.5% in FY26. Net margin improved by 10.5ppt to 21.9%, partially offset by higher staff and listed company costs.
Final dividend declared. LCC declared a final dividend of 1.0 S cent/share, following the company’s recent placement and bonus issue. This brings the total dividend payout to about 2.24 S cents/share using the current enlarged share base of 660m, and represents a payout ratio of around 65%. We expect dividend payout to remain strong going forward at 60%, implying a 7.4% dividend yield for 2026, supported by a net cash position of S$32.0m.
Strong orderbook continues to drive momentum. LCC maintained a healthy orderbook of approximately S$142m as at end-Aug 26, supported by key FY26 wins including the S$31.9m Registries of Civil and Muslim Marriages Building redevelopment, S$31.5m Orchard Road Presbyterian Church, and S$21.7m Covenant Evangelical Free Church. The orderbook also included the recent S$32.9m contract in Jul 26 for architectural and associated works at Teck Ghee Station. Collectively, these projects provide the group with strong revenue visibility over the next 2-3 years.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.32
S$0.46
+43.8%
S$0.51
Analyst
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