BNASTRA (7195): Robust Orderbook Fuels Strong Earnings Visibility
Summary (TL;DR):
- Research Firm: MERCURY Investment Bank
- Subject: BNASTRA / BNASTRA (7195)
- Core Rating: BUY
- Target Price / Top Picks: MYR 2.54
- One-Liner: Binastra clinched a new RM405m contract, boosting its outstanding orderbook to a robust RM4.6bn, ensuring strong earnings visibility and sustainability.
Report at a Glance
MERCURY Investment Bank released its latest research report on BNASTRA on 2025-07-09, maintaining a “BUY“ rating with a target price of MYR 2.54. The core thesis of the report is that Binastra’s consistent ability to secure significant new construction contracts, especially from recurring clients, continues to bolster its already robust orderbook, providing strong earnings visibility and superior profit margins.
Investment Thesis (The Bull Case)
- Point 1: Binastra has clinched a new RM405 million construction contract from Exsim Jalil Link Sdn Bhd for “The Queenswoodz,” a 1,004-unit high-rise residential development in Bukit Jalil, significantly expanding its project pipeline.
- Point 2: This latest win brings FY26 YTD orderbook replenishment to RM1.4 billion, boosting its outstanding orderbook to a robust RM4.6 billion, which represents a solid 3.2x cover of the analyst’s projected FY26 revenue, ensuring strong earnings visibility.
- Point 3 / Key Beneficiaries: The project from a recurring client (Exsim) is expected to maintain consistent margins due to favorable contractual terms and prompt payments. Binastra anticipates another five contract wins in 2HFY26, including projects from Exsim (Central Park Damansara), Maxim (The Atlas @ Taman Desa, Alam Damai, Bandar Sri Permaisuri, Taman Pelangi in Johor), and continued strong tendering efforts beyond core clients like CPI Land and Platinum Victory.
Potential Risks (The Bear Case)
- Risk 1: The report does not explicitly detail major specific risks that could significantly derail Binastra’s performance. While orderbook replenishment was noted as “gradual” at 47% of the FY26 assumption, the analyst expresses confidence in achieving the full target.
- Risk 2: Not explicitly detailed as major specific risks in the report.
- Risk 3: Not explicitly detailed as major specific risks in the report.
Financial Forecast Summary
The analyst’s financial projections for the coming years are as follows:
| Fiscal Year (YE to Jan) | FY25F | FY26F | FY27F |
|---|---|---|---|
| Revenue (RM mil) | 946.6 | 1,460.0 | 1,940.0 |
| Net Profit (RM mil) | 90.3 | 129.8 | 168.1 |
| EPS (sen) | 8.3 | 11.9 | 15.4 |
| DPS (sen) | 3.0 | 3.6 | 4.6 |
| Dividend Yield (%) | 1.6 | 1.9 | 2.5 |
| P/E Ratio (x) | 22.5 | 15.6 | 12.1 |
(Source: MERCURY Investment Bank research report)
Valuation & Target Price
| Rating | BUY |
| Last Close Price | RM 1.86 |
| Target Price (TP) | MYR 2.54 |
| Valuation Methodology | The target price of MYR 2.54 is based on an unchanged 16.5x FY27 PE, indicating the valuation is currently undemanding. |
Analyst’s Conclusion
- Overall Stance: The analyst reiterates a “BUY” rating on Binastra, emphasizing that its current valuation is undemanding given its robust growth prospects and strong fundamentals.
- Key Catalyst/Strength: The primary strength lies in Binastra’s robust and continuously replenished orderbook, driven by strong relationships with long-standing clients and active tendering efforts, coupled with superior profit margins.
- Major Headwind/Risk: The report does not explicitly detail major specific risks or headwinds, focusing instead on the positive trajectory and the company’s ability to mitigate potential challenges.
- What to Watch: Investors should closely monitor Binastra’s progress in achieving its FY26 orderbook replenishment target, especially the anticipated five new contract wins in 2HFY26 from both recurring and new clients, which will be critical for sustaining future earnings growth.
Disclaimer: This article is a summary and interpretation of a research report published by MERCURY Investment Bank on 2025-07-09. 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.
