PETALING JAYA: Binastra Corp Bhd
’s latest contract win worth RM305mil will lift its outstanding order book to a record RM4.9bil.
Assuming a conservative 8% net margin, TA Research estimated this new job will contribute about RM24.4mil to earnings over the project period.
The win translates into a robust 3.2 times cover of the company’s financial year 2026 (FY26) forecast revenue.
Phillip Research’s profit after tax margin for the newly secured project is estimated at 7% to 8%, translating into an earnings contribution of RM21mil to RM24mil.
RHB Research noted Binastra’s first job in the renewable energy (RE) space net margin is likely to be about 7% to 8%.
TA Research raised its target price (TP) for Binastra to RM2.85 a share from RM2.53 previously after the win and reiterated its “buy” call on the stock.
Phillip Research made no changes to its earnings forecast for the company.
It reiterated its “buy” call on Binastra with a TP of RM2.60 a share, based on an unchanged target 16 times multiple on FY27 earnings per share (EPS).
RHB Research also made no changes to its earnings estimates as the latest job win is within its FY26 job replenishment target.
It has a new TP of RM2.69 a share for the company derived by pegging the FY27 EPS to an unchanged 17 times the price earnings (P/E) ratio.
The shares were last traded at RM2.31.
It views this target P/E ratio to be justified amid the group’s diversification beyond non-residential property projects such as data centres and sewage treatment plants.
The downside risks cited were sluggish job replenishment trends.
TA Research remains positive on Binastra’s near-term order book replenishment prospects, as it expects the group to secure the remaining balance of its FY26 target in the coming months.
This is supported by about RM2bil worth of potential job wins from its recurring clients, namely Exsim and Maxim, for their upcoming high-rise residential projects in Johor, with a total estimated pipeline worth RM3.3bil.
In addition, the group is also eyeing RM200mil to RM300mil of potential contracts from the large-scale solar five or LSS5-related solar projects, based on an assumed construction cost of RM3.5mil per MW.
For its second quarter ended July 31, 2025, Binastra’s net profit rose to RM28.42mil from RM22.86mil in the previous corresponding quarter, while revenue grew to RM396.84mil from RM230.88mil a year earlier.
It said in a filing with Bursa Malaysia that the construction sector is expected to experience sustained growth in the coming years.
