Inta Bina Group (INTA | 0192)

Last Price: RM0.52 | Technical Call: BUY

Company Background. Inta Bina Group (INTA), a CIDB-recognized G7 building contractor, boasts over 30 years of experience in Malaysia's construction industry. The group operates through two core business segments: (i) Construction and (ii) Property Development. INTA has successfully completed more than 140 building projects, collectively valued at over RM3bil, with a primary focus on the Klang Valley and Johor regions. Its expertise spans a wide range of properties, including high-rise residential, landed homes, commercial spaces, industrial facilities, and leisure developments.

Prospects. (i) Renowned for its superior craftsmanship, consistently surpassing 75% benchmarks in CONQUAS and QLASSIC with top scores of 83.5% and 90%, the group has established enduring partnerships with leading developers such as Gamuda, Eco World Development, and Mah Sing, (ii) Maintains a steady trend in order book replenishment, strategically balancing portfolio growth and sustainability. As of 30 September 2024, the unbilled order book totals RM1.66bil, providing stable revenue and earnings visibility for the next 2-3 years, and (iii) In FY23, INTA launched its first property development projects to diversify revenue. The group is prioritizing strategic land acquisitions, including a recent 2.72-acre freehold in Selangor, to boost long-term earnings.

Financial Performance. In 3QFY24, INTA posted a higher revenue of RM181mil (+8.8% YoY) with a PAT of RM8.9mil (+43.6% YoY). This was mainly due to higher recognition of progress billings from ongoing and new projects, as well as an improvement in gross profit margin from the gradual stabilization of certain material costs.

Valuation. INTA is currently trading at a trailing P/E of 9x, which is lower than the Bursa Construction Index's 5-year historical average of 18.3x. For comparison, Pesona Metro, which is also a CIDB-recognised G7 building contractor involved in the construction of residential and commercial buildings as well as infrastructure works, trades at a higher trailing P/E of 14x.

Technical Analysis. INTA's buying interest has returned after it broke out of the 2-week bullish flag pattern a few sessions ago. The stock's recovery above the RM0.50 psychological mark, coupled with its rising EMAs, indicates that the near-term bullish trend may persist. A bullish bias may emerge above the RM0.50 level with stop-loss set at RM0.47, below the 50-day EMA. Towards the upside, near-term resistance level is seen at RM0.60, followed by RM0.65.

Entry: RM0.50-0.52

Target: RM0.60, RM0.65

Exit: RM0.47

Source: AmInvest Research - 23 Jan 2025