PETALING JAYA: Inta Bina Group Bhd
’s RM349mil building works project, which is the first construction job secured by the company this year, is expected to lift its total outstanding order book to about RM1.3bil, equivalent to 2.1 times financial year 2023’s (FY23) revenue, TA Research says.
Apart from this, the research house noted that assuming a pre-tax profit margin of 5.4%, the project is expected to contribute RM14.1mil in net profit throughout the construction period.
At the same time, the brokerage added that it is maintaining its FY24 to FY26 earnings estimates, as the job win falls within its FY24 order book replenishment assumption of RM800mil.
In a filing with Bursa Malaysia on Monday, the construction company said it had accepted a letter of award from Eco Ardence Sdn Bhd for main building works worth RM348.92mil for the proposed Maya Integrated Development in Shah Alam, Selangor.
Inta Bina said phase one, comprising commercial shop lots, an office tower, a podium car park and tower and facilities deck would be completed in 33 months, commencing from April 15.
Phase two is scheduled to be completed in 39 months.
The research house said it is not making a change to its target price of RM0.50, based on an unchanged 11 times calendar year 2025 earnings, adding that it is maintaining its “buy” call on the stock.
“We continue to like the company for the following factors: a direct beneficiary of the robust domestic property sector, strong earnings visibility backed by a resilient order book and improving profitability,” it said.
For FY23 ended Dec 31, Inta Bina’s net profit jumped to RM22.87mil from RM9.55mil, while revenue rose to RM650.11mil against RM466.27mil a year earlier.
In a filing on its FY23 performance, Inta Bina said construction activities in Malaysia have managed to sustain its momentum in 2023.
“The value of work expanded 8.6% year-on-year in the fourth quarter 2023 compared to 9.6% in the immediate preceding quarter. The industry is expected to see brighter prospects in 2024,” it said.
Despite a general improvement in the overall construction sector outlook in 2024, the company said its board continues to stay prudent by balancing risks due to inflation, increase in certain material prices, shortage of skilled workers and delayed new property launches with measures to improve financial performance.
“The unbilled order book of approximately RM1bil as of Dec 31, 2023 will sustain the group’s revenue and earnings over the next two to three years,” it said.
