While the building construction industry is facing headwinds, we believe INTA would be able to sail through the challenging times, underpinned by (i) a record outstanding order book of RM1bn (~3.6x FY20 revenue and provides earnings visibility until 2024), (ii) strong execution capability with existing Tier-1 clients who are mostly well-known developers, (iii) a net cash position of 4sen/share end March (12.7% to share price). The stock is trading at undemanding 5.4x (ex-cash 4.7x) FY22E P/E (about 56% lower than peers’ weighted market P/E of 12.3x), supported by strong 20% EPS CAGR for FY21-23, commendable FY21-23E ROE of 17%-19%, and a decent FY21-23E DY of 3.2%-4.8% (vs peers’ FY22 average of 3.4%).

Poised for a bullish triangle breakout. After plunging 31% from 52-week high of RM0.40 (17 Sep 2020) to YTD low of RM0.275 (8 Jan), INTA’s share prices were consolidating upward to settle at RM0.315 yesterday, closing well above multiple key SMAs. A successful breakout above RM0.325 (downtrend line from RM0.40) would signal that a new up-leg has begun, probably heading higher to retest RM0.34 (9 June high) and RM0.35 (28 Apr) resistances before advancing to our LT target at RM0.40 (also the new warrants strike price). Supports are pegged at RM0.29-0.30 levels. Cut loss at RM0.28.

Source: Hong Leong Investment Bank Research - 15 Jun 2021