Bags New Contract Worth RM327.7mn for Main Building Works

BINASTRA has secured a RM327.7mn contract from Exsim Bukit Jalil City Sdn Bhd (EXSIM) for main building and related works. The project involves the construction of two 58-storey blocks of serviced apartments, comprising 1,138 units in Bukit Jalil, Selangor. Key project details are as follows:

(i) Block A – 49-storey (569 Units),

(ii) Block B – 49-storey (569 Units),

(iii) 7 strata shop units and car park on ground floor,

(iv) 7 levels of podium parking,

(v) 2 levels of lower ground parking, and

(vi) Facilities for residents, 1 unit of electrical substation and 1 unit of guard house.

Construction is scheduled to commence on 9 December 2024, with completion expected within 42 months.

Our View

This contract marks BINASTRA’s fourteenth project win this year, bringing its YTD new job wins to RM3.1bn—slightly exceeding our forecast for the year. We are upbeat on this new job win as it boosts BINASTRA’s outstanding order book to a record high of RM3.7bn, equivalent to 8.7x its FY24 revenue.

Based on a historical 3-year net margin of 9.6%, the project is expected to deliver a net profit of approximately RM31.5mn over the construction period.

Forecast

Following adjustments to our progress billing assumptions as reflective of timely revenue recognition from newly secured contracts, our FY25-27F earnings estimates have been revised upwards by 0.2%/2.5%/1.7%, respectively

Valuation

In line with the earnings revision, our target price has been marginally raised to RM2.10 from RM2.05, based on 18x CY25 EPS. Our bullish outlook on BINASTRA remains underpinned by the following: (i) its strong and enduring relationships with key clientele, (ii) its position as a key beneficiary of the property sector’s growth momentum, (iii) solid earnings visibility supported by a resilient orderbook, and (iv) robust earnings growth propelled by continued expansion of its orderbook. Maintain Buy recommendation on the stock.

Source: TA Research - 4 Dec 2024