PETALING JAYA: Construction outfit Binastra Corp Bhd
’s sizeable order book, together with the company’s move into specialised engineering, is supportive of its growth outlook, says Mercury Securities.
The brokerage maintained a “buy” recommendation on the stock and raised its target price to RM3.24 from RM3.12, based on an unchanged 16.5 times price-earnings multiple applied to its financial year ending Jan 31, 2028 (FY28) earnings per share of 19.7 sen.
It noted that the latest contract secured, valued at RM303.8mil and announced in early November, takes year-to-date contract wins to RM1.6bil and the outstanding order book to RM6.2bil.
“We continue to see a supportive outlook for Binastra, backed by its sizeable order book and a deepening pipeline in structurally supported segments,” it said.
It said that the latest contract may contribute to revenue for three months in FY27 and eight months in FY28, assuming no delays in progress.
“We raise our FY27 and FY28 earnings forecasts by 5.2% and 3.9% to RM176.7mil and RM214.3mil, respectively, after including the new RM303.8mil contract as part of our assumption,” Mercury Securities said.
Binastra has secured seven data centre projects worth a combined RM2.4bil since entering the segment, and has expanded into solar installation and specialised engineering through LF Lansen Sdn Bhd, a mechanical and electrical specialist in which the company holds a 51% stake.
“The latest win fits well with our view that demand for industrial facilities, logistics hubs and data centres in Johor and Selangor, supported by the New Industrial Master Plan 2030 and the National Energy Transition Roadmap, will keep construction activity resilient,” it noted.
“We remain positive on Binastra, underpinned by strong earnings visibility from a sizeable order book of RM6.7bil, which provides 3.5 times FY27 revenue coverage and extends visibility through FY27 to FY28. This supports multi-year revenue stability and execution continuity across its core construction activities,” it said.
It added that the company’s diversification into structurally supported segments offers stronger demand visibility as well as improved pipeline depth over time.
