Binastra tipped for 21pct earnings growth, gets "Buy" call
KUALA LUMPUR: Maybank Investment Bank Bhd (Maybank IB) has initiated coverage on Binastra Corp Bhd with a “Buy” call and a target price of RM3.40.
Maybank Investment Bank has rated Binastra Corp Bhd as a Buy, predicting a 21% annual earnings growth over three years. This forecast is contingent upon securing RM2.5 billion in new contracts each year. The investment bank also noted Binastra's strong financial position, with a healthy cash balance that could allow for an increased dividend payout ratio from its current over 50%.
This dividend policy is sustainable as executive directors are not paid salaries, but are instead motivated by dividends. Binastra's Operating Franchise has over 40 years of construction experience, having completed 189 projects totaling more than RM12 billion in revenue. The company has diversified into various sectors, including data centers, renewable energy, sewage treatment, and specialized engineering, with the latter accounting for 30% of its order book.
While these sectors yield lower margins, the firm believes they will contribute to profit faster due to quicker turnaround times.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
