PETALING JAYA: Binastra Corp Bhd’s latest construction contract win, valued at RM235.5mil, brings its total new contracts for the current year to RM1.6bil.
The group is now well within sight of its RM2bil replenishment target for the financial year ending Jan 31, 2025 (FY25).
This latest contract, which involved earthworks, piling, pile caps, main building works and infrastructure for a proposed 39-storey development at Central Park Damansara, increases Binastra’s outstanding order book to approximately RM2.7bil.
This amount is 6.3 times its FY24 revenue and provides strong revenue visibility until FY28. The 40-month contract was awarded by Mightyprop Sdn Bhd, a part of the Exsim Group.
“Assuming 10% profit after tax margin, we estimate this contract to contribute RM24mil across FY24-FY28,” said Phillip Capital Research.
It noted Binastra appeared to be a preferred contractor for the Exsim Group as 70% of the contracts clinched by Binastra in FY25 were from this client.
“Looking ahead, we expect contract flows from Exsim to remain robust, driven by its RM40bil gross development project pipeline and cross-state expansion plan,” the research house stated.
Phillip Capital Research maintained its “buy” rating on Binastra with an unchanged target price of RM1.90 per share. This valuation is based on a target multiple of 18 times its FY26 earnings per share forecast of 10.6 sen.
“We like Binastra for its strong competitive advantage as a preferred contractor with key clients and superior profit margins,” it said.
The key downside risks to its call include slower-than-expected order book replenishment, unforeseen project delays and cost pressures affecting project margins.
