Results Review

• INTA’s 1QFY24 core net profit of RM7.1mn met our expectations, accounting for 26.9% of our full-year estimates.

• YoY, 1QFY24 core profit jumped 74.1% to RM7.1mn, despite a modest revenue growth of 0.6%. The strong earnings performance was mainly driven by improved gross profit margins resulting from stabilising raw material costs.

• QoQ, 1QFY24 core earnings rose by 3.6% with a minimal topline growth of 0.1%, driven by a reduced effective tax rate of 26.0% compared to 29.3% in 4QFY23.

Impact

• We maintain our FY24-FY26F earnings forecasts.

Outlook

• The recovery of the construction sector is expected to benefit INTA, particularly with the launch of new residential projects that were delayed in FY22 due to high input costs. As of the end-March 2024, INTA's unbilled order book stood at RM823.5mn. With new contracts totalling RM942.1mn secured in April and May, we estimate the total outstanding order book to be around RM1.8bn, which is equivalent to 2.8x FY23 revenue.

Valuation

• No change to our target price of RM0.62, based on unchanged 11x CY25 earnings. We continue to like INTA for the following factors: (i) a direct beneficiary of the robust domestic property sector, (ii) strong earnings visibility backed by a resilient orderbook, and (iii) improving profitability. Maintain Buy call on the stock.

Source: TA Research - 29 May 2024