EXSIMHB: Significant Contract Win Boosts Outlook, ‘Buy’ Rating Reaffirmed

A prominent investment bank has highlighted a significant contract win that is set to strengthen Exsim Hospitality Berhad’s (EH) order book and enhance its earnings visibility. The company, through its wholly-owned subsidiary EXSIM Concepto Sdn Bhd, recently secured a RM17.6 million interior fit-out sub-contract from Binastra Builders Sdn Bhd. This contract encompasses the supply, fabrication, delivery, and installation of carpentry works for apartment units, with Binastra Builders serving as the main contractor for the project.

Performance Review

This award marks EH’s first contract win in FY26, signaling a positive start to the financial year. The sub-contract works are scheduled to align with the main construction timeline, which commenced on April 1, 2024, and is expected to be completed by August 31, 2027. This synchronized approach is anticipated to minimize coordination risks and ensure timely project delivery.

With this latest award, and assuming an order book burn rate of RM60 million for IQFY26, the company’s outstanding order book is estimated at approximately RM161.6 million. This figure provides a 1.2x cover of its FY25 design and fit-in segment revenue, reinforcing robust near-term earnings visibility. The contract is projected to contribute around RM2.6 million in Profit Before Tax (PBT) over the contract period, based on an assumed PBT margin of 15%, consistent with similar projects in its existing pipeline.

Future Outlook

Analysts maintain an optimistic view on EH’s near-term order book replenishment outlook. The company is regarded as a natural frontrunner for interior fit-out works within EXSIM Group’s extensive development pipeline, which boasts an estimated undeveloped Gross Development Value (GDV) of at least RM30 billion. This favorable positioning is largely attributed to the shared ownership structure between EH and EXSIM Group, ensuring strong job visibility and a recurring project flow.

Furthermore, this contract win diversifies EH’s client base beyond EXSIM-related projects, as it is the first job secured from Binastra. This new relationship is viewed positively as a potential springboard for EH to secure future opportunities within Binastra’s substantial RM4.9 billion outstanding order book as of September 2025. Assuming a conservative 30% win rate and interior fit-out works accounting for 15% of the total project value, this could translate into an additional pipeline of approximately RM220 million in interior fit-out contracts for EH. This further solidifies the company’s near-term order book replenishment and supports its earnings sustainability.

Investment Recommendation

The investment bank reiterates its “Buy” recommendation for EH, with an unchanged Sum-of-Parts (SOP)-derived target price of RM0.54. The recommendation is underpinned by EH’s strategic position as a beneficiary of EXSIM Group’s development pipeline, its hybrid hospitality strategy offering earnings visibility, and the potential for future value unlock through a hospitality REIT.