INTA: New Contract Win Bolsters Order Book, Reinforcing Buy Recommendation
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.78 (+96.7%) |
| Last Traded | RM0.395 |
| Recommendation |
A recent contract award has significantly strengthened the order book, providing robust earnings visibility and reaffirming a positive outlook. The investment bank maintains its “BUY” recommendation, reiterating a target price that indicates substantial upside.
Contract Details and Financial Impact
The company, through its wholly-owned subsidiary, recently secured a RM49 million contract for main building works. This significant award marks the first job win for the fiscal year 2026, setting a positive tone for the group’s order book replenishment. The contract, which involves the construction of 96 factory units and 6 substations, is scheduled to commence on July 1, 2026, with completion targeted by December 31, 2027.
This new project is expected to boost the outstanding order book to approximately RM1.9 billion, representing a healthy 2.9 times cover of its FY25 construction revenue. This substantial order book is crucial for solidifying earnings visibility for the coming years. Given that the contract was secured from a recurring client, margins are anticipated to remain consistent with typical main building construction projects. The project is estimated to contribute approximately RM2.5 million in net profit over its construction period.
Future Outlook and Recommendation
The contract win underscores management’s sustained capability to secure new construction order book, even amidst a competitive tendering environment. With a sizeable RM4.9 billion tender book, the company is well-positioned to achieve its FY26 new job replenishment assumption of RM850 million. The investment bank states that the new job win aligns with its replenishment assumptions, leading to no changes in current earnings forecasts.
The investment bank maintains its “BUY” call on the stock, with a target price of RM0.78, based on an unchanged 8x CY27F P/E. Key factors favoring this stance include the company’s position as a direct beneficiary of the robust domestic property sector, strong earnings visibility underpinned by a resilient order book, and improving profitability. The current last traded price is RM0.395.
