INTA: Solid Earnings Performance Bolstered by Property Segment, Target Price Maintained Amidst Strong Order Book

Investment bank TA Securities has reiterated its “BUY” recommendation for the company, maintaining a target price of RM1.00. This follows the reporting of a robust first half of fiscal year 2025 (IHFY25) adjusted net profit of RM18.5 million, which accounted for 42.9% and 44.7% of TA Securities’ and the consensus’ full-year forecasts, respectively. The performance is deemed broadly in line with expectations, with earnings anticipated to accelerate in the second half of the year driven by stronger progress billings from recently secured contracts.

Performance Review

The company’s revenue saw a significant year-on-year (YoY) increase of 21.6%, primarily propelled by an exceptional 195.3% improvement in the property division. This surge was attributed to higher progress billings from its flagship project, Senuri Residence. Concurrently, steady contributions from ongoing construction works supported a 21.0% expansion in core net profit, aligning with the topline growth.

However, on a quarter-on-quarter (QoQ) basis, revenue experienced a mild decline of 4.4%, primarily due to a lower contribution from the construction division. This was largely a result of the phase-out of several tail-end projects and a temporary absence of new contract wins, leading to a 10.2% fall in core earnings QoQ. The group also declared a first interim dividend of 1.0 sen per share, representing 40% of TA Securities’ FY25 dividend projection.

Order Book and Future Outlook

As of end-March 2025, the company’s construction order book stood at a substantial RM1.3 billion, equivalent to 2.0 times its FY24 construction revenue. This extensive pipeline provides clear earnings visibility through FY28. Furthermore, unbilled property sales totaling RM64.7 million are expected to reinforce revenue certainty over the next two years.

TA Securities remains optimistic about the group’s job replenishment outlook, maintaining its assumption of RM1.0 billion in contract wins for FY25. To date, the company has successfully secured RM467 million in new projects, achieving 46.7% of its full-year target. Momentum is expected to accelerate in the fourth quarter of FY25, in line with the broader industry trend of residential launches typically peaking in the second half of the year.

Valuation and Recommendation

The investment bank reiterates its target price of RM1.00, which is based on an unchanged 11x CY26 earnings multiple. The stock is considered attractive, offering an estimated dividend yield of 5.6% based on the projected FY25 dividend payout. The “BUY” call is underpinned by several key factors: the company’s position as a direct beneficiary of the robust domestic property sector, strong earnings visibility supported by a resilient order book, and improving profitability trends.