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KUALA LUMPUR (March 18): Binastra Corporation Bhd (KL:BNASTRA) is poised to close its financial year 2026 with a "bang", according to RHB Research, who is projecting a sharp 60% to 100% jump in its upcoming fourth-quarter earnings, driven by its strong RM7 billion order book.
The research house expects the construction group's earnings for the quarter ended Jan 31, 2026 (4QFY2026) — due for release on March 26 — to land between RM40 million and RM50 million. The bullish outlook comes as the group's outstanding order book translates into a 7.4x order book-to-revenue cover ratio based on FY2025 revenue — one of the highest under RHB's coverage.
"We think this is achievable as more projects — particularly in Johor (eg: The Asteriaz at Jalan Kebun Teh, awarded in April 2025) — move higher along the S-curve," RHB said in a results preview note, projecting a three-year FY2025-2028 earnings CAGR of 32% for Binastra. The 'S-curve' refers to the lifecycle of a construction project, where progress starts slowly during the foundation stage, accelerates during the main building phase, and tapers off as it nears completion.
RHB noted that Binastra's current order book represents a massive leap from the RM1.4 billion balance recorded at the end of FY2024. For the upcoming financial year (FY2027), the research house thinks a job replenishment target of RM3 billion is reasonable, saying the group may want to focus on delivering its sizeable RM7 billion outstanding orderbook.
"Medium-term potential job prospects include the remaining phases of the Asteriaz project by Exsim Development in Johor Bahru, estimated to be worth RM400-RM500 million," it said.
Johor-based contracts now account for 30% to 35% of Binastra's outstanding order book, it noted, following a series of high-profile wins in early 2026. The Rapid Transit System (RTS) Link to Singapore remains a primary catalyst, fuelling demand for new property launches, especially within the Bukit Chagar station, it added.
On that note, RHB said Binastra may clinch another RM1 billion worth of construction contracts from Exsim Group, who is highly likely to its six-acre land near New York Hotel in Johor Bahru that carries an estimated gross development value of RM2.3 billion.
The group's recent awards in the state include the RM1.2 billion Causewayz Square serviced apartment project by Exsim, and RM742.9 million The Address @ Taman Pelangi project from a unit of Maxim Global Bhd (KL:MAXIM).
According to Bloomberg data, all eight research houses covering Binastra have a "buy" call on the stock. The consensus 12-month target price currently stands at RM2.66, suggesting an upside of nearly 30% from the stock's current price, which closed at RM2.05 on Tuesday, valuing the group at RM2.24 billion.
RHB has a slightly higher target price of RM2.72, derived by applying a target price-to-earnings multiple of 17x to the group’s forecast 2027 earnings per share, with an additional 2% premium ascribed for its environmental, social, and governance or ESG performance.
It noted that the stock currently trades at 12.8x FY2027F P/E — a discount compared to when the Bursa Malaysia Construction Index was trading at around 16x levels during the 2017 construction upcycle. "We think this is unjustified, as Binastra is diversifying beyond non-residential property projects," RHB said.
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