Maintain HOLD

Excluding one-offs, 4QFY22 core net profit was within our expectation. We trim FY23/24E earnings by 5%/6% post house-keeping, and introduce FY25E. Our revised TP is MYR2.20 (-20sen) based on unchanged 7x FY23E core EPS plus net cash (+ financial assets) of 84sen/sh end-FY22. PINT’s high cash (+ near cash) level above its working capital needs - at 37% of the stock’s current market value - should continue to provide support amid challenges posed by order book replenishment and cost pressure.

FY22 core net profit down 43% YoY

4QFY22 headline net profit included a MYR17m gain from the sale of its land in Shah Alam. Excluding this and other one-offs, 4Q core net profit was MYR2.5m, bringing 12M core profit to MYR31m (-43% YoY), at 95% of our FY22E. Despite higher construction revenue both YoY/QoQ, 4QFY22 construction pretax margin was just 0.9% (-18.9ppts YoY, +0.1ppts QoQ), impacted by higher material, fuel and labour costs, and low productivity. Consequently, 12M construction margin was down 8.7ppts to 7.7%.

Order book provides 12M visibility

Outstanding order book stood at MYR240m as at end-FY22 (end-FY21: MYR450m). This offers earnings visibility into FY23E, with the duration of most of the works being short-term in nature (<12 months). Management is optimistic on job wins in SG but is mindful on sudden cost escalation that may be hard to foresee in new tenders. Our earnings forecasts have imputed MYR300m of job wins in FY23E.

Labour shortage, consolidation, share buy-back

In the notes accompanying its FY22 results, management urges urgent action by the MY government to resolve the foreign labour shortage issue. Positively, material and fuel prices seem to have peaked, providing some relief. Management expects consolidation in the piling industry going forward which should be positive for PINT. On the back of its strong cash/near cash position, PINT is proposing to seek shareholders’ approval to renew its share buyback programme (up to 10% of its paid-up capital) at its upcoming AGM. A final DPS of 6sen for FY22 has been proposed.

Source: Maybank Research - 30 Aug 2022