Period  4QFY12/12MFY12

Actual vs. Expectations BPURI's FY12 net profit of RM5.0m came in below our estimates, making up 93% of our FY12E net profit of RM5.4m, due to higher effective tax rate.

Dividends  A final dividend of 2 sen less tax at 25% was declared, as expected.

Key Result Highlights  QoQ, the 4Q12 pretax profit grew by 274% to RM7.8m despite a decrease in the revenue (-13%) due to the significant increase in the operating margin by 2.4ppt from 0.1% to 2.5%. The improvement was backed by its construction unit performance, where the operating profit improved 369% to RM7.6m and made up 98% of its total operating profit. Operating margin expansion is underpinned by 1.8ppt and 3.4ppt margin improvement on its construction and polyol segment.

 YoY, the group registered a net profit of RM0.7m against a loss of RM1.5m due mainly to a lower effective tax rate of 93% as compared to last years' effective tax rate of 113%. Bina Puri's effective tax rate remained high at 93% albeit a decrease of 20ppt due to the under provision of its tax charges in the previous years.

Outlook  Moving forward, Bina Puri will continue to focus on executing its existing order book of c.RM2b given its low order book replenishment visibility in the near term.

Change to Forecasts There are no changes to our earnings estimates.

Rating    Maintain UNDERPERFORM

 We are maintaining our UNDERPERFORM call on Bina Puri given the upcoming general election risk coupled with the lacklustre sentiment in the construction sector in the near term.

Valuation  We value Bina Puri at RM0.40 based on an unchanged 5.0x PER on its FY13E EPS.

Risks  Escalating building material prices.

Source: Kenanga