Binastra's Subang Sentral win within earnings expectations but more to come — analysts

KUALA LUMPUR (March 19): Binastra Corp Bhd (KL:BNASTRA) is in a favourable position to secure subsequent phases of its recent Subang Sentral contract win, potentially adding RM600 million to RM700 million to its order book due to its position as the main contractor, according to analysts.

In research notes on Thursday, the analysts also point to firm residential property demand from rising population density in Klang Valley to support future prospects.

“The initial engagement with HCK [Capital Group Bhd (KL:HCK)] is strategically significant, as it may establish Binastra as a preferred contractor across HCK’s sizeable pipeline, with an estimated GDV [gross development value] exceeding RM15 billion in the Klang Valley,” said TA Securities.

The construction firm recently secured a RM316.5 million contract from HCK to revive Subang Sentral on Wednesday (March 18), which had been in construction purgatory since 2019.

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The project spans four phases and has an estimated total construction value of over RM1 billion, the analysts said.

The award represents Binastra’s second contract win for its financial year ending January 2027, which brings year-to-date job wins to about RM820 million. This comes against replenishment targets of between RM2.5 billion and RM3 billion.

Its latest win gives earnings visibility over the next three to four years, with its outstanding order book having risen to a record RM7.1 billion, equivalent to about 7.5 times its FY2025 revenue.

According to the research notes, nine analysts maintained their 'buy' calls and earnings forecasts for the construction firm, noting that the latest contract falls within their existing assumptions. The target prices range from RM2.66 to RM2.80 for an average of RM2.69.

TA Securities expects the Subang Sentral contract to deliver a net margin of 9%, contributing an estimated RM28.5 million in net profit over the construction period.

The HCK job win is a similar strategy seen previously where Binastra secured work from CPI Land which has potential residential developments in Selangor and Johor, adding to more potential contract wins, said RHB Investment Bank.

RHB cited data from the Department of Statistics Malaysia showing rising population density in Klang Valley at about 8,546 persons per sq km in 2025, up from around 8,080 per sq km in 2022.

Data from AskEdge shows Binastra currently trading at a price-to-earnings ratio of 19.2 times, below its historical average.

At the time of writing on Thursday, Binastra shares were unchanged at RM2.04, valuing the group at RM2.2 billion.

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