Results Review

• INTA’s 9MFY23 net profit of RM16.4mn came in within expectations, accounting for 78.2% of our full-year estimate.

• A second interim dividend of 0.5sen/share was declared, bringing the YTD dividend to 1.0sen/share. (9MFY22: 0.5sen/share)

• YoY, 9MFY23 net profit jumped 103.4% to RM16.4mn, thanks to higher work progress and better gross margin as a result of gradual stabilisation of certain construction materials and labour costs. Meanwhile, the group saw its revenue jump 43.1% to a record high of RM491.3mn.

• QoQ, 3QFY23 net profit surged 4.7% to RM6.3mn although revenue was 0.3% lower at RM166.4mn. The stronger bottom line was mainly due to higher gross margin.

Impact

• Maintain FY23 to FY25 earnings forecasts.

Outlook

• As of end-September 2023, the group’s outstanding construction order book stood at RM1.1bn, translating to around 2.4xFY22 revenue. This could provide earnings visibility to the group for the next 3 years.

Valuation

• No change to our target price of RM0.34, based on unchanged 10x CY24 earnings. Reiterate a Buy call on the stock.

Source: TA Research - 29 Nov 2023