PETALING JAYA: TA Research is positive on Exsim Hospitality Bhd’s prospects, supported by the group’s exposure to its development pipeline.
In a report, the research firm said for financial year 2027 (FY27), Exsim Hospitality has secured RM182.1mil worth of new contracts year-to-date, lifting its unbilled construction order book to approximately RM673.2mil.
This represents a healthy order book coverage of about 3.2 times FY26 construction segment revenue, which provides strong earnings visibility up to two years.
“Based on our estimates, we expect approximately 35% to 40% of the outstanding order book to be recognised in FY27, translating into an estimated order book burn rate of RM235.6mil to RM269.3mil, which implies 10.6% to 26.4% year-on-year growth,” TA Research said.
Going forward, the research firm said it expected order-book replenishment momentum to remain healthy, as well as incremental opportunities from its external tender book.
“Besides, we also see further opportunities for interior fit-out works from financial institutions as Exsim Concepto Sdn Bhd, the wholly-owned interior fit-out arm, has successfully registered itself as the panel renovator for various banks like CIMB, Affin Bank and UOB.”
Furthermore, Exsim Hospitality’s hotel assets are on track to begin operations – Portrait Hotel and Portrait Resort are set to open by the end of this month.
Upon full operationalisation, these two properties will add a combined 531 rooms to the group’s own-to-operate hotel portfolio, strengthening its long-term recurring income stream.
“While we do not anticipate a meaningful earnings contribution from this segment in FY27, the on-schedule commencement of operations significantly reduces execution risks and provides greater earnings visibility.
“Looking ahead, we anticipate a more meaningful earnings contribution from FY29 onwards as both properties mature operationally, supported by improving occupancy rates, room yields and operating leverage,” the research firm noted.
TA Research said the hospitality segment will continue being a strong growth driver for the group.
Under its Mana Mana brand that has 4,275 signed units, 2,442 units are operational while 1,832 are undergoing renovations. This represents a 283% year-on-year expansion in its managed portfolio.
The research firm said this should place the group firmly on track to achieve its target of expanding its managed portfolio to more than 10,000 keys by FY30.
“Looking ahead, the progressive completion and on-boarding of the remaining units should provide an additional earnings growth catalyst, as the transition of these units into operational status is expected to progressively enhance the group’s revenue contributions.”
With that, TA Research revised its target price to 59 sen from 56 sen, and maintained its “buy” recommendation.
