PETALING JAYA: Binastra Corp Bhd
’s latest RM491mil contract secured from Exsim Sri Permai Sdn Bhd for its phase 2 data centre (DC) project in Cheras, Kuala Lumpur, is estimated to contribute around RM29.5mil in net profit over its construction period.
This is assuming a net margin of 5%. Notably, the contract represents Binastra’s third job win in financial year 2027 (FY27), lifting its year-to-date new job wins to RM1.3bil, TA Research said.
“At the current replenishment rate, it achieved circa 52% of our FY27 replenishment assumption of RM2.5bil.
“Consequently, we estimate its outstanding order book to increase to approximately RM6.8bil, equivalent to a robust 7.2 times FY25 construction revenue, providing strong earnings visibility over the next four years,” TA Research said in a report.
The contract was awarded under a cost-plus arrangement, as evidenced by the inclusion of provisional sums, which should help mitigate potential margin pressure arising from construction cost inflation.
The Exsim job is to be completed within 18 months from July 1, 2026.
The latest DC project also marks the company’s seventh DC-related contract to date, bringing its cumulative DC job wins to approximately RM2.4bil.
“We view this positively as it strengthens Binastra’s track record in delivering DC projects, which we believe could improve its prospects of securing further contracts from both existing and new clients.
“Given the short construction cycle and sizeable contract values of DC projects, we expect these contracts to facilitate faster earnings recognition, providing a meaningful boost to revenue and earnings growth,” said TA Research, which kept its “buy” call on the stock with RM3.04 target price.
RHB Research and Phillip Capital Research were equally positive on the stock.
RHB Research said while Binastra’s involvement in DCs is smaller versus other listed contractors, it envisages the company’s appetite to venture beyond its bread and butter residential property projects could pave way for other projects not limited to DCs.
