Binastra's data centre job wins could pave way for bigger opportunities—analysts

KUALA LUMPUR (Feb 5): Binastra Corporation Bhd’s (KL:BNASTRA) series of data centre-related job wins could pave the way for the group to expand further beyond residential property projects, analysts said.

While its involvement in data centres is relatively smaller versus other listed contractors, "the company’s appetite to venture beyond bread-and-butter" projects could land it into other opportunities beyond data centres as well, RHB Research said.

"This is already evident, through the awards related to sewage treatment plants and solar projects," it said in a research note.

At the same time, Binastra "could benefit from the ongoing DC investment upcycle in the region, particularly from multinational hyperscalers", said TA Research in a separate note.

Binastra this week announced its sixth data centre-related project win, valued at RM503 million, from Exsim Sri Permai Sdn Bhd in Kuala Lumpur. This brought Binastra's order book to a new record high of RM7 billion.

"Assuming a net margin of 4%, consistent with Binastra’s historical margins for Exsim Group-related data centre projects, we estimate the contract to contribute approximately RM20.1 million in net profit over the construction period," the research house said.

At Wednesday's close of RM2.14, Binastra was trading at about 13.7 times its estimated earnings for the financial year ending Jan 31, 2027 (FY2027), compared to 16 times price-earnings for the Bursa Malaysia Construction Index during its upcycle in 2017, RHB Research said.

"We believe this as unjustified, especially when we consider its diversification beyond non-residential property projects," it added.

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