PETALING JAYA: Johor continues to offer meaningful upside for Binastra Corp Bhd
, with further job opportunities likely to emerge as infrastructure-led development gains momentum.
On Wednesday, the construction group secured a RM742.9mil contract for the main building works of a high-rise development in Johor Baru.
With the latest win, the group’s year-to-date job wins for the financial year 2026 (FY26) rise to RM4.2bil, which exceeds RHB Research’s initial job replenishment target of RM4bil for the same period.
“Post-new job win, Binastra’s balance order book stands at a record high of RM6.6bil, which translates into an orderbook-revenue cover ratio of seven times.
“We estimate this latest main building works for The Address to have a net margin of around 10%,” RHB Research said in a report yesterday.
In July last year, the group was awarded with a RM38mil contract for substructure works for The Address.
According to the research firm, Binastra has secured around RM2.5bil worth of contracts from Johor Baru and the upcoming Rapid Transit System (RTS) Link project will continue to spark demand for property launches, especially within the vicinity of the Bukit Chagar station.
“Based on our estimates, jobs from Johor make up between 30% and 35% of the group’s outstanding order book of RM6.6bil. We learnt that there could be another two phases for The Asteriaz at Jalan Kebun Teh in Johor Baru which we estimate could have a construction value of between RM400mil and RM500mil,” added the research firm.
It noted that Exsim Development Sdn Bhd also has a six-acre land plot near New York Hotel in Johor Baru with an estimated gross development value of RM2.3bil, which could be later developed and may translate to a potential construction value of around RM1bil for Binastra.
Following this, RHB Research has raised the stock’s target price to RM2.72 from RM2.69 and kept its “buy” call.
At the time of writing, its shares were trading around the RM2.20 level.
RHB Research said its current valuation at 14.2 times FY27 price-to-earnings was a discount to when the Bursa Malaysia Construction Index was trading at around 16 times during the 2017 construction upcycle.
Likewise, Phillip Capital and TA Research maintained their “buy” rating on the stock. They noted that Binastra had the competitive advantage as a preferred contractor with key clients and commands superior profit margins.
This is because of its long-standing relationship with major clients that provide steady project flow.
