There is a new name on the SGX Mainboard, and most retail investors have probably never heard of it.

EGP Energy Corporation is not a flashy technology company or consumer brand. It builds and maintains the transmission and distribution infrastructure that helps keep Singapore’s electricity network running.

That may sound boring. But boring businesses can become interesting when they combine high barriers to entry, a large order book and strong profit margins.

At the same time, EGP’s reliance on one major customer creates a risk that investors should not ignore.

Here are seven things to know about the EGP IPO.

EGP provides engineering, procurement, construction and maintenance services for Singapore’s electrical transmission and distribution network.

Its work includes extra-high-voltage and high-voltage transmission systems, as well as medium-voltage distribution infrastructure.

In plain English, the company helps construct, upgrade and maintain the physical systems that move electricity from the grid to businesses, industrial facilities and homes.

This is essential infrastructure. Delays, poor workmanship or safety failures can disrupt critical services, which is why customers generally prefer contractors with established technical capabilities and proven execution records.

That creates a business where trust, certification and experience matter more than marketing.

As of May 2026, EGP was one of only 16 firms in Singapore registered under the L6 SY04 category in the Building and Construction Authority’s Contractors Registration System.

L6 is the highest financial grade under this category and allows a contractor to tender for projects without a bidding limit.

This does not guarantee EGP will win every contract. However, it narrows the competitive field for larger and more complex projects.

A new contractor cannot simply hire a few engineers and compete immediately. It needs the right registration, technical track record, manpower, equipment, safety systems and customer confidence.

For investors, this is probably EGP’s clearest competitive advantage.

EGP’s financial performance has strengthened considerably over the past three financial years.

Revenue more than doubled from FY2023 to FY2024 before recording slower growth in FY2025.

Profit after tax continued growing in FY2025 despite the modest revenue increase. This suggests EGP benefited from improved margins or a more favourable project mix.

A net margin of roughly 26% is strong for a contractor. However, investors should remember that project-based earnings can be uneven.

The timing of project recognition, contract mix, labour expenses and material costs may cause margins to change from year to year.

As at 31 May 2026, EGP had an order book of approximately S$239 million.

That is more than six times its FY2025 revenue of S$38.9 million.

A large order book gives the company greater visibility over its future workload. It also reduces the immediate pressure to continually secure enough new projects just to maintain revenue.

However, an order book is not the same as guaranteed profit.

Projects still need to be completed on time and within budget. Revenue recognition may stretch across several years, while cost overruns, manpower constraints and delays could affect profitability.

Investors should therefore monitor how quickly EGP converts its order book into revenue and cash flow.

The order book looks impressive, but much of EGP’s recent growth is tied to one key utility customer.

In FY2025, more than four out of every five dollars of revenue came from one counterparty.

This customer concentration may reflect a strong long-term relationship and EGP’s position as a trusted contractor. But it also means the company has limited room for error.

If the customer reduces spending, delays projects, changes procurement policies or appoints more contractors, EGP’s earnings could be affected materially.

The company’s growth plan to broaden its customer base is therefore not just a bonus. It is central to reducing business risk over time.

EGP raised approximately S$30.6 million from the IPO.

Around S$27.4 million is expected to be used to expand its product offerings and customer base, strengthen maintenance and digitalisation capabilities, and support expansion into Malaysia and Indonesia.

The remaining proceeds will mainly support working capital.

This is important because the IPO is not simply allowing existing shareholders to cash out. A substantial portion of the funds is being directed towards future growth.

Regional expansion could increase EGP’s addressable market, but it will also introduce new execution risks.

Malaysia and Indonesia may have different regulatory requirements, customer relationships, tender practices and competitive conditions. Investors should watch whether the company expands carefully or adds costs before meaningful revenue appears.

EGP priced its IPO shares at S$0.51 each.

Based on approximately 225.5 million shares after the listing, the implied market capitalisation is around S$115 million.

Using FY2025 profit after tax of S$10.3 million, the valuation works out to roughly 11 times historical earnings.

On the surface, that does not look excessive for a profitable infrastructure contractor with a large order book and high barriers to entry.

However, the valuation depends on whether FY2025 earnings are sustainable.

The company’s high customer concentration, project-based revenue and regional expansion plans mean investors should not assume profit will grow smoothly every year.

EGP has also indicated an intention to distribute up to 40% of net profit after tax as dividends for FY2026 and FY2027.

If earnings remain around FY2025 levels, this could translate into a reasonable payout. But it is an intention rather than a guaranteed dividend policy.

To round things up, let us run EGP through my VCBM framework: Value, Catalyst, Business and Management.

At approximately 11 times FY2025 earnings, EGP’s IPO valuation appears reasonable rather than obviously cheap.

The valuation is supported by its profitability, large order book and limited pool of qualified competitors. However, investors should avoid valuing the company based on one year of strong margins alone.

VCBM view: Fairly valued, provided earnings remain resilient.

The company has several possible growth catalysts.

The most important catalyst is customer diversification. Winning contracts from new customers would support growth while lowering concentration risk.

VCBM view: Clear catalysts, but execution must be demonstrated.

EGP operates in an essential infrastructure segment with meaningful barriers to entry.

Its L6 SY04 registration, technical expertise and established customer relationships make the business harder to replicate than a typical small contractor.

The weak point is concentration. The company is currently highly dependent on one customer and a relatively narrow market.

VCBM view: Attractive niche business, weakened by concentration risk.

Management has delivered strong revenue and profit growth while building a sizeable order book.

The proposed use of IPO proceeds is also largely growth-oriented, which is encouraging.

Still, the next phase will be more difficult. Management must diversify the customer base, preserve margins, manage regional expansion and deploy the IPO proceeds carefully.

VCBM view: Good execution so far, but the post-listing track record is still untested.

EGP has several qualities that usually get me interested in a small or mid-cap stock: a niche business, high entry barriers, strong profitability and visible growth catalysts.

But the customer concentration is too large to treat as a minor footnote.

The next few reporting periods should reveal whether EGP can convert its order book into healthy cash flow while gradually winning more customers.

That is the key factor I would monitor before forming a firmer view on the company.

This is exactly the kind of overlooked Singapore company that the VCBM framework was designed to analyse.

This article is for general information and educational purposes only. It does not take into account your objectives, financial situation or needs. Investors should conduct their own research and consider speaking with a licensed financial adviser where appropriate.