KUALA LUMPUR (Aug 27): Inta Bina Group Bhd (KL:INTA) is set for stronger earnings growth this year thanks to new contracts, TA Securities said on Tuesday after the construction company reported better-than-expected results.

TA Securities, the sole research house covering Inta, raised its full-year earnings forecast by 11% as core net profit of RM15.3 million for the first half ended June 30, 2024 (1HFY2024) made up 57% of the full-year estimate. The house also reiterated its ‘buy’ call and lifted its target price to 72 sen from 71 sen previously.

“Looking ahead, we expect the earnings outlook to remain robust, supported by a strong outstanding order book,” TA Securities said.

Shares of Inta have been surging this year and hit a record high in July thanks to a slew of contract announcements from the company that only has a market capitalisation of RM248 million.

On Tuesday, Inta rose as much as 5.6% or 2.5 sen to 47.5 sen, its highest since July 29. The stock was trading at 47 sen at 9.40am after 2.37 million shares changed hands.

The stock has racked up some 73% so far this year, tracking a rally in the construction sector benefiting from a surge in activity building everything from roads to data centres.

The company has secured about RM1.1 billion worth of new jobs year-to-date, making up over two-thirds of TA Securities’ order replenishment projection of RM1.6 billion for FY2024.

“These new contracts, which offer better margins, are anticipated to contribute positively to Inta’s bottom line” in 2HFY2024, the research house noted.

TA Securities now expects Inta to make a net profit of RM29.5 million for FY2024, before picking up to RM41.2 million in FY2025.

“We continue to like Inta” as the company is a direct beneficiary of the robust domestic property sector, and for its strong earnings visibility backed by a resilient orderbook as well as improving profitability, TA Securities added.

On Monday, the company reported a 37% increase in net profit for the second quarter ended June 30, 2024 (2QFY2024), as a higher gross margin offset a decline in revenue. Revenue for the quarter dipped 7.7% year-on-year to RM154.11 million for 2QFY2024.

The company also declared its first interim dividend of one sen per share payable on Sept 19.