Lim & Tan Securities has just put out a Special Report recommending a BUY for Lum Chang Creations (LCC), a Singapore urban revitalisation specialist.
The analysis highlights the firm's expertise in conservation and restoration, citing robust FY25 financial results driven by a 173% surge in net profit. The report authored by analyst Chan En Jie came on the heels of two major contract awards to LCC totalling $63.4 million. LCC was listed on Catalist in July 2025 at 25 cents. |
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Here are the 10 key facts extracted from Lim & Tan Securities report:
1. Significant Contract Wins Boost Order Book: LCC recently secured two contracts collectively valued at $63.4 million.
One project, worth S$31.5 million, involves the conservation of the historic Orchard Road Presbyterian Church (constructed in 1878).
Deliverables in the 24-month contract include a new erection of a 5-storey annex block (Dunman Hall) with basement, and A&A and conservation works to the existing Sanctuary.
Then there is a S$31.9 million public sector contract awarded by the Ministry of Social and Family Development for the 30-month redevelopment of the Registries of Civil and Muslim Marriages Building.
2. Revenue Visibility into 2028: The new contracts, combined with existing projects, boost LCC's order book to $160 million.
This backlog provides revenue visibility extending into 2028.
3. Technical Expertise, Pricing Power: LCC's strength lies in its ability to handle "sophisticated and sensitive public-facing infrastructural assignments".
The ROMM building contract, for instance, was awarded to LCC despite the company not being the lowest bidder (the latter's bid was S$23.2 million compared to LCC's S$31.9 million; the highest was S$50.6 million), a check on GeBiz, the government online portal for tenders, by Lim & Tan Securities showed.
This reflects the quality benchmarks used in the government's price-quality evaluation method—such as past performance, specific competencies, and track record.
4. Robust Financial Growth: LCC delivered robust FY25 results with substantial growth.
Revenue soared by 93% year-on-year to S$113.6 million, while net profit surged by 173% to S$12.9 million.
5. High Margins and Asset-Light Model: LCC operates a capital-efficient, asset-light model that contributes to high Returns on Equity (ROE).
Forecasted ROE for FY26 is 45.6%.
The Group reported gross margins of 19.7% in FY25, which is favourable compared to peers in the interior fit-out space, according to the Lim & Tan Securities report (see table):
|
Name |
Market Cap (S$M) |
Gross Margin (%) |
Net Margin (%) |
|
Lum Chang Creations |
149.6 |
19.7 |
11.4 |
|
Lincotrade & Associates |
35.3 |
12.5 |
3.6 |
|
Attika Group |
40.8 |
15.1 |
5.1 |
6. Favorable Valuation: The company's performance translates into attractive forward metrics.
Lim & Tan Securities forecasts suggest a strong outlook: “Our FY26F profit forecasts are raised by 35% to derive earnings of S$17.9mln, translating to an attractive 8.4x forward P/E.
"We are adding LCC as one of our top picks to our Nov’25 Client Portfolio, joining Tiong Woon and KSH Holdings in the Construction Category.”
Lum Chang Creations MD: Lim Thiam HooiThe broker maintains a BUY rating with a target price of S$0.70/share, representing a potential upside of +47.4%.
(CGS International, the other broker covering LCC, has a target price of S$0.81)
7. Solid Balance Sheet: LCC maintains a strong financial footing, holding a net cash position equivalent to 22% of its market capitalisation.
8. Increasing Dividend Payout: LCC paid a final FY25 dividend of 2.2 cents, based on a 53.7% payout ratio.
This payout is higher than the Group’s IPO commitment to provide at least 30% of profits as dividends for FY25 and FY26.
The dividend forecast for the upcoming year (FY26F) is 2.6 cents, which represents a decent 5.5% yield.
9. Strong Market Outlook: The Urban Revitalisation Specialist (URS) industry in Singapore is projected to grow robustly, benefiting LCC's core capabilities in conservation and restoration.
The industry is forecast to grow at a 6.8% CAGR from 2024 to 2027, supported by the Singapore government's commitment towards the heritage preservation of buildings and a strong pipeline of projects.
LCC is one of the five major players and is the only listed company among them.
| 10. Key Risks Involve Project Acquisition and Material Costs: A primary risk is the non-recurring nature of conservation, restoration, and A&A projects, meaning LCC must continuously secure new customers and contracts to maintain revenue and profitability levels. Furthermore, LCC relies primarily on fixed lump sum project-based contracts. This structure exposes the company to risks of cost overruns due to fluctuations in the prices of key materials such as steel, timber, electrical cables, and building materials, noted Lim & Tan Securities. |
→ The full Lim & Tan Securities report is here.
→ See also: LUM CHANG CREATIONS: Gets Post-IPO Surge, What's The Story?
