Result Review

• INTA’s 1HFY24 core net earnings of RM15.3mn exceeded our expectations, accounting for 57.3% of our full-year estimates. This positivesurprise was primarily due to a quicker-than-anticipated margin recovery, Driven by Recently Secured Construction Projects.
• The group experienced a moderate revenue decline of 3.7% YoY in1HFY24, Largely Due to Reduced Contributions From Certain Tail-endconstruction projects. Despite this, PBT jumped 51.7% YoY, supported by Improved Margins From the Newly Secured Projects.
• On a QoQ basis, INTA’s PBT grew by 16.5%, despite the revenue Decreasing by 3.1%, Mainly Due to the Aforementioned Reasons.
• A first interim dividend of 1.0sen/share was declared in 2QFY24 (2QFY23: 0.5sen/share).

Impact

• Given the better-than-expected results, we toned up our progress billing and Margin Assumptions for Certain Projects. Correspondingly, Our FY24/25/26F Earnings Forecasts Have Been Adjusted Upward by 10.9%/2.0%/1.6%, Respectively.

Outlook

• Looking ahead, we expect the earnings outlook to remain robust, supported by a strong outstanding order book of RM1.7bn as of end-June, equivalent to 2.7x FY23 revenue. Notably, INTA has secured approximately RM1.1bn in new jobs YTD, representing 68.8% of our new job replenishment assumption of RM1.6bn for the year. These new contracts, which offer better margins, are anticipated to contribute positively to INTA’s bottom line in 2HFY24.

Valuation

• Following the earnings revision, we raised our target price to RM0.72 (from RM0.71 previously), premised 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. Reiterate Buy.

Source: TA Research - 27 Aug 2024