$Deluge Corporation Limited(9DC.SI)$ offers more than fire protection installation. Its real value lies in combining high entry barriers with recurring maintenance revenue.
As one of only eight contractors holding Singapore’s highest BCA L6 ME06 grade, Deluge can tender for public-sector projects of unlimited value. Its S$410.8 million order book provides revenue visibility over four years.
However, FY2026 revenue fell 16.5%, highlighting project-based earnings volatility. A large order book also does not guarantee profits or healthy cash flow, particularly given substantial upfront project costs.
The growth opportunity lies in converting installations into recurring maintenance contracts and expanding into Malaysia’s data centre market.
My view: Deluge has an attractive business model, but execution, cash conversion and customer concentration will determine whether its valuation is justified.
@SGX_Stars [财迷]
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