A cash-rich, asset-backed Tier 1 contractor at a deep discount—if Aveng can finally clear legacy project losses and unlock value via separation, the re-rating could be dramatic.
Overview
Aveng Limited is an engineering-led international contractor with roots dating back to 1880 and a portfolio now concentrated in two core businesses: McConnell Dowell (Australasian/Southeast Asian infrastructure and building) and Moolmans (African contract mining). The investment case is framed as a deep-value turnaround following years of restructuring and asset divestments, with the share price reflecting heavy skepticism due to FY25 losses tied to two legacy, pre-2020 lump-sum mega-projects—Singapore’s Jurong Region Line (J108) and Australia’s Kidston Pumped Hydro—which drove a Group operating loss and headline loss. Despite the difficult FY25, early FY26 results show a visible inflection: gross margins recovered to 5.6% and the Group returned to operating profitability, while work-in-hand expanded to ~A$3.5bn and net cash increased to ~A$250m. The report argues the market is pricing Aveng as distressed and applying a conglomerate discount, even though net cash is multiple times the market capitalization and NAV per share materially exceeds the traded price. The central catalysts are completion/settlement of legacy projects and the strategic separation of McConnell Dowell and Moolmans to unlock a peer-multiple re-rating.