Revising FY24E earnings; TP and HOLD unchanged

PINT’s 3QFY24 net profit positively surprised on better contribution (fair value gain) from quoted investments. The construction ops remained loss- making albeit smaller QoQ on higher activities. Management is more hopeful on its outlook in 2025. We now expect FY24E to turn in a small net profit (vs. a small loss earlier). Our TP is unchanged at MYR1.70 based on 0.7x FY24E P/B, its -1.5SD of LT mean (also its low in early-2012). HOLD.

Construction ops still weak, but improving

3QFY24 net profit of MYR4.3m (2QFY24: MYR5.4m loss, 3QFY23: MYR3.7m profit) brought 9MFY24 net profit to MYR0.1m. Key highlights:

• 3Q construction revenue rose 36% QoQ, leading to a smaller pretax loss of MYR2.2m (2QFY24: -MYR7.3m). Manufacturing posted QoQ higher revenue (higher sales volume) and profit (higher margins).
   
• 9M construction revenue fell 21% YoY due to reduced activities and more competitive rates for new projects. A MYR11.4m provision for liquidated damages for projects in MY more than offset profits in SG, leading to a MYR10.8m pretax loss at the construction ops (9MFY23: - MYR6.5m). Manufacturing revenue and profit improved YoY.

More hopeful on its outlook in 2025

Outstanding orderbook was MYR316m as at end-Mar 2024 (vs. MYR230m Jun 2023), implying MYR260m new jobs in 9MFY24. Management noted an increase in its tender book value and sense an upturn in construction activities generally. They are hopeful for more jobs with better rates in 2025 when larger government projects like the Penang LRT, flood mitigation and Pan Borneo, and more private sector projects kick off. Over at SG, more projects from both the public and private sectors should contribute to an expanded orderbook (with better rates and margins).

Raising FY24 forecast; maintain FY25-26E

Imputing the better-than-expected 3QFY24 earnings, we now expect a small MYR1m net profit in FY24E (vs. MYR1m loss previously). Our forecasts have imputed MYR300m job wins (unchanged) in FY24E. Balance sheet remains healthy, in a net cash of MYR128m (77sen/shr) end-Mar 2024.

Source: Maybank Research - 21 May 2024