BNASTRA (7195): Securing Growth with Strong Order Book and Preferred Contractor Status
Summary (TL;DR):
- Research Firm: PHILLIP Investment Bank
- Subject: BNASTRA / BNASTRA (7195)
- Core Rating: BUY
- Target Price / Top Picks: RM2.60
- One-Liner: BNASTRA continues to reinforce its position as a preferred contractor with key clients, securing significant contracts that underpin its robust order book and superior profit margins.
Report at a Glance
PHILLIP Investment Bank released its latest research report on BNASTRA on 9 July 2025, maintaining a “BUY“ rating with a target price of RM2.60. The core thesis of the report is that BNASTRA’s recent contract win from EXSIM falls within the analyst’s replenishment assumptions, solidifying its strong order book and competitive advantage as a preferred contractor, thus maintaining a positive outlook.
Investment Thesis (The Bull Case)
- Point 1: BNASTRA secured a new RM405 million construction contract from EXSIM for two blocks of apartments (1,004 units) at The Queenswoodz @ Bukit Jalil.
- Point 2: This marks BNASTRA’s fourth consecutive contract from EXSIM for the Bukit Jalil project site, reinforcing its status as a preferred contractor for major clients.
- Point 3 / Key Beneficiaries: The latest award boosts year-to-date job wins to RM1.4 billion, representing 40% of the FY26E order book replenishment assumption. Its outstanding order book now stands at a healthy RM4.6 billion, providing a 4.9x cover of its FY25 revenue. The company is also underpinned by a solid RM6-7 billion pipeline of committed project launches from major clients in Johor for FY26-27E.
Potential Risks (The Bear Case)
- Risk 1: Slower-than-expected order book replenishment could impact future revenue growth.
- Risk 2: Unforeseen project delays might affect project timelines and profitability.
- Risk 3: Project margin cost pressure could erode the company’s superior profit margins.
Financial Forecast Summary
The analyst’s financial projections for the coming years are as follows:
| Fiscal Year (YE to Jan) | FY26E | FY27E | FY28E |
|---|---|---|---|
| Revenue (RM mil) | 1,693.4 | 2,324.2 | 2,815.5 |
| Net Profit (RM mil) | 132.8 | 176.7 | 227.6 |
| EPS (sen) | 12.2 | 16.3 | 21.0 |
| DPS (sen) | 3.7 | 4.9 | 6.3 |
| Dividend Yield (%) | 2.0 | 2.6 | 3.4 |
| P/E Ratio (x) | 15.2 | 11.4 | 8.9 |
(Source: PHILLIP Investment Bank research report)
Valuation & Target Price
| Rating | BUY |
| Last Close Price | RM1.86 |
| Target Price (TP) | RM2.60 |
| Valuation Methodology | The target price is based on an unchanged target 16x multiple on FY27E EPS. |
Analyst’s Conclusion
- Overall Stance: PHILLIP Investment Bank maintains a “BUY” rating on BNASTRA, expressing continued confidence in the company’s ability to secure new projects and maintain healthy profit margins.
- Key Catalyst/Strength: BNASTRA’s strong competitive advantage as a preferred contractor for key clients, coupled with its superior profit margins and a substantial project pipeline (RM6-7bn) in Johor, are the primary drivers for its growth.
- Major Headwind/Risk: The most significant risks include a potential slowdown in order book replenishment, unforeseen project delays, and pressure on project margins due to rising costs.
- What to Watch: Investors should monitor BNASTRA’s continued success in securing new contracts, the timely execution of its current projects, and any developments impacting project costs and margins.
Disclaimer: This article is a summary and interpretation of a research report published by PHILLIP Investment Bank on BNASTRA. All information is for reference purposes only and does not constitute investment advice. Investors should conduct their own independent research and due diligence and assume all associated risks.
