Lowering earnings; HOLD unchanged

PINT fell into the red in 4QFY24, bringing 12MFY24 to a loss after tax of MYR5m. This compares to our MYR1.5m net profit forecast for FY24, with the shortfall due to losses at its M’sia construction ops. We cut FY25-26E net profit forecasts by MYR5m each, and introduce FY27E. Our TP is also lowered to MYR1.64 (-6sen) based on unchanged 0.7x P/B, its -1.5SD of LT mean (also its low in early-2012) but on rolled forward FY25E BVPS. HOLD.

Losses at the M’sia construction ops

PINT’s 4QFY24 net loss of MYR5.1m brought 12MFY24 to a loss of MYR5m, the 2nd consecutive year of being in the red. The weak 4Q was due to continued losses by the M’sia construction ops while the S’pore ops also delivered reduced profits. For FY24, the construction ops’ loss before tax widened to MYR20m from MYR5m in FY23, on lower activities in M’sia and lower rates for newly secured contracts in S’pore. This was compounded by a MYR15.4m provision for liquidated damages for late delivery of projects in M’sia. FY24’s construction loss at its M’sia ops exceeded the profits generated from its construction ops in S’pore.

More hopeful on its outlook only in 2025

Management noted on excess capacity in M’sia vis-à-vis demand for piling, leading to tender prices being generally depressed. Consequently, PINT has temporarily transferred some of its capacity to S’pore, expecting an improvement in its M’sia ops only in 2025. Positively, the group’s construction activities in S’pore has increased in the current FY25. Based on its tender activities, management is optimistic of a better FY25.

Remains in net cash; declares 5sen DPS

Balance sheet remains healthy, in a net cash of MYR156m (94sen/shr; including financial assets ie. marketable securities and equity fund investments) as at end-Jun 2024. This should provide some support to its share price, in our view. A 5sen 1st and final DPS for FY24 (unchanged YoY) has been proposed, subject to shareholders’ approval at an upcoming AGM.

Source: Maybank Research - 29 Aug 2024