GenusPlus (ASX: GNP) Doubled Since Our First Call — Here’s Why We’re Still Holding

Key Takeaway: We maintain our HOLD rating on GenusPlus Group Ltd (ASX: GNP) even after the stock has doubled* since our initial call at $2.16 per share and now trades above $4. This impressive run speaks to the strength of the company’s fundamentals and its pivotal role in Australia’s growing energy and communications infrastructure. With around 90% of revenue for FY2025-27 already secured through a strong order book, alongside a healthy pipeline and strategic acquisitions broadening its reach, GenusPlus is well positioned for steady growth. Its conservative balance sheet and upgraded earnings guidance further contribute to confidence in its outlook. While the pace of gains may slow, we see clear upside to our revised target above $4.20 - $4.55, making it sensible to hold and capitalise on the company’s long-term prospects in the context of Australia’s infrastructure momentum. --- We update our outlook on GenusPlus Group Ltd (ASX: GNP), which has more than doubled since our original recommendation at $2.16 per share. Trading above $4 per share, the stock’s impressive run confirms the robustness of the company’s fundamentals. With momentum intact and promising catalysts ahead, we maintain our HOLD rating and raise our target price above $4.20 - $4.55. A Key Infrastructure Provider Positioned at the Heart of Australia’s Energy and Communications Networks Founded in 2017, GenusPlus has established itself as a vital player in Australia’s infrastructure sector. Its diversified operations span overhead power infrastructure, underground power and telecommunications, electrical and mechanical services, and high voltage testing. Serving a broad range of clients, including government, utilities, telecoms, and industrial sectors, the company generates most of its revenue from critical electrical transmission and distribution networks. Source: GNP (2025) [1] Capitalising on Australia’s Infrastructure Boom with Strategic Government-Backed Projects GenusPlus is well placed to benefit from the country’s ambitious infrastructure agenda, particularly the shift towards renewable energy and enhanced digital connectivity. Its involvement in major government-led initiatives, including the $1.4 billion HumeLink Project and substantial Battery Energy Storage System contracts, highlights its role as a core contributor to Australia’s energy transition and infrastructure modernisation. A Robust and Visible Order Book Underpins Revenue Stability and Growth Prospects A standout feature of GenusPlus’s outlook is its strong project pipeline. With a record contracted order book of $1.5 billion and approximately 90% of projected revenue for FY2025-2027 secured, the company enjoys a high degree of earnings visibility. Moreover, a tender pipeline of $2.2 billion and budgeted opportunities exceeding $4 billion offer a promising runway for sustained expansion. Financial Strength That Provides Flexibility and Minimises Risk GenusPlus maintains a conservative capital structure with a debt-to-equity ratio of just 2.6%, well below industry peers. This strong balance sheet, coupled with a cash reserve close to $90 million as of HY2025, affords the company the flexibility to self-fund acquisitions and capital investments. This prudent financial management reduces risk while enabling proactive growth strategies. Source: Investor Pulse, Research (2025) [2] The company’s half-year results reinforce its positive trajectory, with revenue climbing 33% year-on-year and normalised EBITDA rising 25%. Net profit after tax surged over 50%, and management has increased its EBITDA growth guidance for FY2025. This performance signals efficient execution and resilience despite ongoing cost pressures within the sector. Strategic Acquisitions Diversify Revenue Streams and Expand Market Reach GenusPlus has been actively broadening its footprint beyond core power infrastructure. Recent acquisitions in communications and rail systems sectors diversify its revenue base and reduce reliance on any single market segment. This strategic expansion positions the company to capture broader infrastructure spending and improves its long-term resilience. Our continued HOLD rating reflects confidence in GenusPlus’s capacity to deliver on its substantial project pipeline and capitalise on Australia’s infrastructure investment momentum. The company’s strong financial health, solid operational growth, and strategic diversification make it an attractive long-term investment. While recognising the stock’s strong gains to date, we see additional upside potential toward our revised target of above $4.20 - $4.55, making it a prudent holding for investors. Valuation and Recommendation Since our initial call at $2.16 per share, the stock has captured an impressive 91.20%* gain, currently trading near $4.12. Our target price above $4.20 - $4.55 suggests there is still some upside, though the pace of gains is expected to moderate. Industry Tailwinds and Market Environment Supporting Long-Term Growth in Australian Infrastructure Sectors Australia’s infrastructure sector remains on a solid growth path. The utility services market alone is forecast to grow at a 3.52% CAGR to reach $6.3 billion by 2033. Power consumption is set to increase by 3.10% CAGR, while telecommunications continue a steady 1.60% annual growth. This momentum is supported by a hefty $213 billion Major Public Infrastructure Pipeline and $16 billion earmarked for utilities infrastructure, particularly in renewable energy and transmission. Key growth drivers include government infrastructure programs, urbanisation pressures, technology adoption like smart grids, renewable energy integration, and the 5G rollout. However, headwinds such as rising costs, supply chain bottlenecks, labour shortages, and competition from Tier-1 players pose ongoing challenges, factors GenusPlus must navigate carefully. Strategic Positioning and Project Pipeline That Aligns GenusPlus with Australia’s National Infrastructure Priorities GenusPlus benefits from its alignment with Australia’s infrastructure priorities. The company is actively involved in marquee projects like the $1.4 billion HumeLink and various Battery Energy Storage System developments, alongside nbn Fibre Upgrade works. A record $1.5 billion order book underpins near-term visibility, with approximately 90% of revenue for FY2025-27 already secured. Recurring revenue streams, including long-term maintenance contracts, are projected to grow to $276 million in FY2025, enhancing earnings stability. Moreover, strategic acquisitions such as CommTel Network Solutions and MGC Group Holdings have broadened GenusPlus’s footprint beyond Western Australia, with East Coast operations now accounting for 38% of group revenue in HY2025. Source: GNP (2025) [3] Financial Performance Highlights Including Revenue Growth, Profitability Improvements, and Upgraded Earnings Guidance GenusPlus has demonstrated robust revenue growth — 33% year-on-year in HY2025, reaching $333 million, and $551.2 million for FY2024. This momentum translates into strong earnings, with normalised EBITDA up 25.1% and net profit rising 51.4% in the first half of 2025. Margins have expanded modestly, with normalised EBITDA margin improving to 8.7%, reflecting sound cost control amid inflationary pressures. Management’s upgraded EBITDA growth guidance of 28-32% for FY2025 (excluding acquisitions) signals confidence in continued earnings expansion. Financially, the company is in a robust position, boasting a net cash stance with net gearing at -59.2% and a conservative debt-to-equity ratio of just 2.6%. Cash reserves of nearly $90 million at HY2025 provide ample liquidity to support growth initiatives. Valuation Methodology Combining Discounted Cash Flow Analysis and Relative Peer Comparisons Our valuation blends a discounted cash flow model with peer comparisons. The DCF points to an intrinsic share value between $4.65 and $4.80, assuming steady revenue growth, stable margins, and a low beta of 0.36 that supports a lower cost of capital. Relative to peers, GenusPlus trades at an EV/EBITDA of 11.8x, in line with growth-oriented peers such as Tasmea and Maas Group. Its price-to-book and price-to-sales ratios also carry a premium justified by its strong balance sheet and revenue visibility. This supports a relative valuation target range of $4.20 to $4.40. Taken together, our blended target price stands at $4.55. Technically, GenusPlus has sustained a strong upward trajectory. The stock has decisively surpassed prior resistance levels and maintains momentum above key moving averages, reflecting steady investor confidence. GenusPlus’s blend of strategic positioning, strong order book, and financial discipline supports a favourable long-term outlook. The nearly doubling in share price since our initial recommendation reflects the market’s recognition of its value. While some near-term volatility or consolidation may occur, the fundamentals remain sound. Existing shareholders should maintain their positions to capitalise on ongoing growth, while prospective investors might consider opportunities during any short-term pullbacks. *Past performance is not an indicator of future performance.