KUALA LUMPUR: Inta Bina Group Bhd’s latest contract win will ensure a more than comfortable position for the group, giving it solid earnings visibility for the next two and a half years.
Inta Bina has been awarded the contract for Phase 2C-main building works at Gravit8, Klang, by Vibrantline Sdn Bhd, a wholly-owned subsidiary of Mitraland Holdings (M) Sdn Bhd. The contract is worth RM106mil.
The job is for the mixed development of a 30-storey serviced apartment, which comprises two floors of retail units, seven-storey car park, six-storey of serviced apartment, facilities and recreational floor, one serviced apartment block and a bridge.
The construction works will commence on April 26, with a construction period of 28 months.
This, said TA Securities, is the first major job win for Inta Bina in financial year ending Dec 31,2021 (FY21), bringing its estimated outstanding order book to about RM1.1bil, which is close to the previous all-time high of RM1.15bil.
“Backed by the strong outstanding order book and from a low base in FY20, we forecast FY21 net profit to surge 155.6% to RM25.9mil, followed by a further 20.4% net profit growth to RM31.2mil for FY22, ” it said in a note yesterday.
TA also highlighted that Mitraland Group is a repeat customer of Inta Bina. The previous jobs, which Inta Bina had successfully completed for Mitraland Group included 16 Quartz at Melawati, Gombak, as well as the previous phase at Gravit8, involving the construction of two blocks of apartments with a contract value of RM192mil.
Given that the job win is within its FY21 order book replenishment assumption of RM450mil, TA has kept its FY21 to FY23 earnings forecasts.
The brokerage maintained its “buy” rating on Inta Bina with a target price at 53 sen based on unchanged 10 times FY22 diluted earnings per share.
“At the current market cap of RM161mil, it translates into undemanding forward price-earnings multiples of 6.8 times and 5.7 times for FY21 and FY22 respectively. Furthermore, the group has a healthy balance sheet with a net cash position of RM11.7mil as of end-December 2020, ”it said.