Our 2026 picks: Hiap Tong Corporation - Cheapest valuation, but will the market give it a re-rating chance?

 

Established in 1978 and listed on the SGX Catalist board in Dec 2009, the company provides hydraulic lifting and haulage s

Apart from the construction players benefitting from this whole infrastructure upcycle, the supporting cast, such as the building material suppliers, and also the niche segment of crane operators, which are an integral part of the ecosystem, are reaping the benefits from this as well.

In the Singapore market, listed crane operators include Tiong Woon,  Sin Heng and Hiap Tong)  . Tat Hong, a leading player, was previously listed on the Singapore Exchange but was delisted in 2018. Compared by market capitalisation, Tiong Woon is the largest at $230 million, followed by Sin Heng at just over $77 million, and finally Hiap Tong at just over $40 million.

Just by comparing their respective price-to-book ratios, both Tiong Woon and Sin Heng trade at 0.72 times and 0.74 times, respectively, while Hiap Tong trades at a mere 0.35 times.

On the surface, Hiap Tong appears to be the cheapest in terms of price-to-book valuation. Will the market potentially re-rate Hiap Tong to a more reasonable valuation?

Established in 1978 and listed on the SGX Catalist board in Dec 2009, the company provides hydraulic lifting and haulage services to the marine, petrochemical, and construction industries in Singapore.

As at March 31, 2025, the company has a fleet size of 451 vehicles that combines both lifting and haulage fleets, consisting of 229 cranes (with lifting capacities ranging from 10 to 1200 tonnes) and 222 units of haulage equipment &mdash a far cry from the single 10-tonne mobile crane back when it started business.

As described in its annual report, some of its notable customers include Seatrium&rsquo s business units and affiliates in the marine industry, as well as ExxonMobil Asia Pacific and Sankyu in the petrochemical industry. Shanghai Tunnel Engineering Co (Singapore), a regular MRT contractor, is also a customer of Hiap Tong&rsquo s.

In their latest 1HFY2025 results ended Sept 30, 2025, Hiap Tong&rsquo s revenue was up by a mere 2.0% y-o-y to $45.2 million, driven by higher revenue from the lifting and haulage segment in Singapore.

However, the lower administrative and finance costs drove net profit after tax up by more than 20% y-o-y to $1.7 million.

From Hiap Tong&rsquo s perspective, the current demand for lifting and haulage services in Singapore remains healthy, supported by a pipeline of large public-sector construction projects.

Meanwhile, the company has recently begun the redevelopment of 22 Soon Lee Road, with demolition of existing structures having commenced and construction expected to start in the second half of FY2026, subject to approval of the building plan by the Jurong Town Corporation (JTC).

According to the company, the total cost for this redevelopment project is between $20 million and $24 million and will be funded through a combination of bank borrowings and internal resources. The redevelopment is expected to be completed by the end of FY2027.

Market watchers say this redevelopment project will include a worker dormitory to house a significant number of Hiap Tong&rsquo s foreign workers, who are currently in dormitories managed by third-party operators.

With the completion of this redevelopment project, Hiap Tong will be able to reduce rental costs, potentially translating into a stronger bottom line in the medium term.

The key takeaway is that with the robust construction demand, improvement in the company&rsquo s financial performance, as well as the potential cost savings from the ongoing redevelopment project, the market could ultimately re-rate Hiap Tong&rsquo s valuation towards a much higher level, which is comparable to the current valuation level compared to its peers.