BNASTRA: Record Order Book Secures Long-Term Earnings Visibility
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A recent significant contract win has propelled a construction group’s year-to-date job achievements to RM4.0 billion, successfully meeting its replenishment target for the current financial year. This robust performance has led to a record-high outstanding order book of RM6.6 billion, providing substantial earnings visibility for at least the next three years.
Performance Review and Outlook
The latest contract, valued at RM742.9 million for a main building construction project, significantly contributed to the group’s strong order book. This record-high figure for the outstanding order book represents approximately 7.0 times its FY25 revenue cover, a level that positions the company among the strongest in the construction sector for revenue certainty.
The company’s strategic focus on long-standing relationships with major clients has been a key driver of its success, with a substantial portion of new job wins originating from these recurring clients. For instance, new job wins from a specific region alone account for 70% of the FY26 year-to-date total, with 80% of these from existing clientele.
Future Growth and Analyst View
Looking ahead, the investment bank anticipates that these strong client relationships will continue to underpin order book replenishment into FY27. A robust pipeline of potential projects from existing clients, including several multi-phase developments, is expected to generate over RM3.5 billion in new job opportunities. This estimate does not even include potential external contract wins, suggesting considerable upside to current job win assumptions.
Reflecting this positive trajectory, TA Securities has maintained a “BUY” recommendation. The investment bank’s optimistic outlook is supported by the group’s enduring client relationships, its strategic positioning to capitalize on the property and construction upcycle, and a resilient, expanding order book that ensures robust earnings visibility and growth prospects. The target price set by the bank implies a significant upside potential for the stock, reinforcing confidence in its future performance.
