BNASTRA: Strong Order Book and Strategic Expansion Drive Optimistic Outlook
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
Financial analysts are increasingly bullish on a key construction player, driven by a robust project pipeline, strategic expansion into new sectors, and solid operational execution. The investment bank maintains its “BUY” recommendation, citing significant growth opportunities ahead.
Performance and Pipeline Review
The company continues to solidify its market position, particularly within the Johor region. Recent ground checks and site visits have reaffirmed confidence in a visible project pipeline from key clients. The group has successfully secured RM0.6 billion worth of contracts to date, with an additional RM2.7 billion anticipated to be rolled out progressively through FY26-27E from existing Johor projects. This includes three upcoming developments in Johor Bahru with a combined Gross Development Value (GDV) of RM8.3 billion, where sales momentum has been highly encouraging, with projects like The Asteriaz achieving an 89% take-up rate. To support this growth, the group has established a new Johor office and deployed 30% of its workforce to the region.
Strategic Growth Areas
Beyond its established core, the company is actively pursuing opportunities in high-growth sectors. It is well-positioned to benefit from Maxim’s upcoming project, expected to translate into an RM800 million main construction package by end-CY25. Furthermore, the group is aggressively tendering for smaller-scale data centre (DC) projects, typically valued between RM200-500 million, building on its three ongoing DC initiatives. Expansion into the renewable energy (RE) space is also a key strategic focus, with collaborations for LSS5 and solar/BESS projects targeted for FY26. Management has reiterated an ambitious internal order book replenishment target of RM4-4.5 billion for FY26.
Outlook and Risks
The positive outlook is underpinned by the company’s strong competitive advantage as a preferred contractor to key clients. Despite this, potential downside risks include slower-than-expected order book replenishment, unforeseen project delays, and pressure on project margins. Nevertheless, the investment bank believes the company’s strategic positioning and pipeline visibility outweigh these risks.
Investment Recommendation
TA Securities reiterates its BUY recommendation for the company, setting a target price of RM0.25, representing a significant upside from the last traded price of RM0.20. The rating is driven by the promising project pipeline and strategic initiatives to capture growth in new sectors.
