BNASTRA: Green Energy Foray Drives Target Price Upgrade

Investment analysts have maintained a “BUY” recommendation for Binastra Corporation, raising its target price to MYR2.69 from MYR2.64. This upward revision follows the company’s significant entry into the renewable energy (RE) sector and a subsequent enhancement of its environmental, social, and governance (ESG) profile.

Landmark Green Energy Contract

Binastra Green Energy (BGE), a wholly-owned subsidiary of Binastra Corporation, recently secured a landmark MYR305 million contract from Bahru Stainless. This nine-month engineering, procurement, construction, and commissioning (EPCC) project involves the development of a 65MWp solar photovoltaic (PV) system—comprising both rooftop and ground-mounted installations—alongside a 200MWh battery energy storage system (BESS) at Bahru Stainless’ production facility in Pasir Gudang, Johor. This marks Binastra’s inaugural venture into the renewable energy space, with an estimated net margin of 7-8%. The broader Malaysian solar PV EPCC services industry is projected to grow from MYR0.7 billion in 2024 to MYR1.3 billion by 2027, underscoring the strategic importance of this new direction.

Robust Orderbook and Future Outlook

With this latest contract, Binastra has secured MYR1.9 billion in new job wins year-to-date for FY26F, contributing to a robust outstanding orderbook projected at approximately MYR4.8 billion. While current earnings estimates remain unchanged, the group is actively pursuing further opportunities. Binastra is well-positioned to clinch major building works for EXSIM Development’s Causewayz Square, with a projected gross development value (GDV) of approximately MYR3.5 billion, and potentially MAXIM Global’s development in Taman Pelangi, Johor Bahru, estimated at MYR800 million. These potential projects could add an additional MYR2.1-2.2 billion to its orderbook by end-FY26F.

ESG Enhancement and Valuation

The strategic shift into renewable energy projects has positively impacted Binastra’s ESG score, which has been upgraded to 3.1 (out of 4), reflecting a 2% premium. This improved ESG standing is the primary driver for the new target price of MYR2.69, which is derived by pegging FY27F EPS to an unchanged 17x P/E. Analysts view this target P/E as justified given Binastra’s successful diversification beyond traditional non-residential property projects, now including data centres and sewage treatment plants.

Risks to Consider

A key downside risk identified for the company is a potential slowdown in job replenishment trends.