EXSIMHB: Order Book Strengthens with New Contract, ‘Buy’ Rating Maintained

A prominent hospitality player has significantly bolstered its order book with a substantial new subcontract, leading to the reaffirmation of a ‘Buy’ rating by TA Securities. The investment bank maintains its target price at RM0.40, indicating a potential upside of 29.5% from the last traded price of RM0.310.

Recent Contract Win Boosts Order Book

Last Friday, the company, through its wholly-owned subsidiary, secured a RM73.7 million subcontract from a subsidiary of Binastra Corporation Berhad. This contract encompasses the supply and installation of building services, alongside general building works. This win is pivotal, as it is slated to commence following shareholder approval for a proposed diversification into general contracting.

This latest addition elevates the company’s cumulative FY26 year-to-date new job wins to an impressive RM182.1 million. Consequently, the total unbilled order book now stands at approximately RM255.9 million, translating into a healthy 1.8x cover of its FY25 interior fit-out construction segment revenue. Analysts estimate that this particular contract could generate approximately RM11.1 million in Profit Before Tax (PBT), assuming a 15% margin consistent with historical projects from the same client.

Strategic Diversification and Future Outlook

The company is well on track to achieve its FY26 new job replenishment assumption of RM250 million, with current order wins accounting for 72.8%. This positive outlook is supported by robust internal job flow from its strategic partner’s expansive development pipeline, boasting a cumulative Gross Development Value (GDV) exceeding RM30 billion, as well as consistent business from existing clientele.

Notably, the RM73.7 million contract marks the company’s inaugural general contracting-related job since its proposed diversification into this segment was announced in February 2026. This strategic expansion is viewed favorably, as it broadens the construction segment’s capabilities beyond interior fit-out, allowing the group to bid for a wider array of construction works, including structural and building-related packages, which typically command higher contract values. This move is expected to strengthen order book replenishment momentum and enhance project pipeline visibility.

Analyst’s Recommendation

Given that the new job win aligns with expectations, TA Securities has made no changes to its earnings forecast. The investment bank reiterates its ‘Buy’ recommendation on the stock, underpinned by its strategic position as a beneficiary of its partner’s development pipeline, its hybrid hospitality strategy ensuring earnings visibility, and the potential future value unlocked through a hospitality REIT.

Key downside risks highlighted include a slower-than-anticipated new job replenishment pace and a weakening tourism sector outlook.