PETALING JAYA: Binastra Corp Bhd
’s lastest contract has pushed its order book to a record high of RM5.8bil translating to an order-book-revenue cover ratio of six times.
According to RHB Research, the main building works for the Causewayz Square in Johor have a net margin of 10%.
With Binastra already clinching RM3.4bil worth of new jobs year-to-date financial year 2026 (FY26) versus its internal job win target of RM4bil, the remaining RM0.6bil that Binastra needs to hit its RM4bil new job win target for FY26 is to mainly come from Johor or projects in the Klang Valley.
“We learnt that there could be two more phases for The Asteriaz which we estimate could have a construction value of between RM400mil and RM500mil,’’ RHB Research said.
TA Research said on a conservative 9% net margin, the project would contribute about RM106mil to earnings over the project period.
Binastra secured its largest contract, winning RM1.2bil in awards for building and infrastructure works at Exsim group’s Causewayz Square in Johor Baru.
RHB Research, TA Research, Phillip Research and Mercury Research did not make any changes to their earnings forecast, as the contract win falls within their replenishment assumptions.
They retained their “buy” call on the stock. Phillip Research had a 12-month target price (TP) of RM2.60 a share, based on an unchanged target 16 times multiple on the FY27 earnings per share (EPS).
TA Research’s TP is RM2.85 a share based on 17 times 2026 EPS.
RHB Research maintained its TP of RM2.69 a share derived by pegging the FY27 EPS to an unchanged target 17 times price earnings ratio.
Mercury Research’s TP at RM2.54 a share is premised on FY27 EPS of 15.4 sen and price earnings ratio of 16.5 times.
The shares were last traded at RM2.19.
“We continue to like the group for its strong competitive advantage as a preferred contractor with key clients and superior profit margins,’’ said Phillip Research.
The key downside risks cited include slower-than-expected order book replenishment, unforeseen delays and project margin cost pressure.
“Given that the contract was awarded by its recurring client, Exsim, we expect the project margins to be consistent at around 8% to 9% for Binastra’s typical high-rise residential construction projects,” Mercury Research said.
This win lifted its total outstanding order book to RM5.8bil, representing a solid three times coverage of its estimated FY27 revenue.
“Johor-based projects command a higher 12% profit after tax margin, above the group’s high-rise developments in the Klang Valley, due to more complex logistics and procurement planning,” Phillip Research pointed out.
It remained positive on Binastra’s prospects for replenishing its order book, underpinned by Maxim Global’s Taman Pelangi development (RM800mil in works yet to be awarded). Binastra is also exploring opportunities with CPI Land Sdn Bhd in Tampoi, Johor, which could add around RM500mil to the group’s order book.
