Inta Bina rallies to record high share price. Can it go further?

Inta Bina Group Bhd has made commendable jump in its share price to hitanew record high of 48.5 sen on June 5, after the construction company announced that it had secured a RM111.98 million contract.

The rally did not stop as the counter continued its good run to surge to a high of 52 sen on June 6.

However, it succumbed to profit taking to close at 50 sen on June 7.

Over the past year, Inta Bina skyrocketed some 130%, after hovering at a low of 20 sen in June last year. having crossed the near-term resistance level of 50 sen. Investors will be waiting to see if it can surpass the next resistance level of 55 sen.

Excitement over the smallish construction outfit is understandable given the positive news flow. The company won 5 new jobs year-to-date, valued a total of RM1.1 billion.

The latest project, which involves the construction of 174 semi-detached houses, is expected to contribute a net profit of RM4.6 million. This is from the construction period of 23 months based on a 5.4% profit-before-tax margin.

Inta Bina’s total outstanding order book is estimated to be around RM1.8 billion, equivalent to 2.9 times of the group’s FY2023 revenue.

Shares of Inta Bina have surged amid a broader rally in the construction sector.

The expected rollout of major infrastructure projects by the government and private companies, ranging from building homes to data centres, has fuelled optimism in the sector.

Inta Bina is seen as a direct beneficiary of the robust domestic property sector while citing strong earnings visibility backed by a resilient order book and improving profitability. It is now expected to win a total RM1.6 billion worth of new jobs this year.

Analysts expect Inta Bina post RM26.6 million in net profit this year, with a target price of 71 sen, valuing the company at 11 times its forward earnings.

In the first quarter ended Mar 31, 2024, its net profit rose to RM7 million from RM4 million a year ago. This was on the back of a flattish revenue of RM158 million.

The recent good run up in Inta Bina share price may have deterred investors from putting money in the counter. But with much upside for the company, it may continue to do well and be reflected in its share price in the near term.