This article first appeared in The Edge Malaysia Weekly on October 13, 2025 - October 19, 2025

LESS than three years after Datuk Jackson Tan Kak Seng did a backdoor listing by taking over Comintel Corp Bhd, Binastra Corp Bhd (KL:BNASTRA) is now the fifth-largest construction company on Bursa Malaysia in terms of market capitalisation.

Binastra’s share price has more than tripled since the start of 2024, from 64.1 sen to RM2.28. The company undertook a one-for-one bonus issue last year. 

Binastra’s market capitalisation currently stands at RM2.5 billion, below that of industry giants Gamuda Bhd (KL:GAMUDA), IJM Corp Bhd (KL:IJM), Sunway Construction Group Bhd (KL:SUNCON) and Kerjaya Prospek Group Bhd (KL:KERJAYA).

Tan, a civil and structural engineer by training, tells The Edge that undertaking the backdoor listing was not a way for him to cash out, but to take Binastra to the next phase of growth. He currently has a 56.49% stake in the listed entity.

He also runs privately owned construction outfit Binastra Construction (M) Sdn Bhd, which was founded by his father Tan Nge in 1980. The firm is currently undertaking five projects worth RM1 billion.

Tan reveals that Binastra Construction will eventually become an investment holding company as the new job wins will be for the listed entity. Binastra’s outstanding order book currently stands at RM4.69 billion, giving it revenue visibility of three to four years.

Notably, the contracts awarded by Exsim Group account for more than 50% of its order book. This concentration risk may raise some eyebrows in the investor community.

However, this was the result of a strategic pivot that Tan made about a decade ago. Binastra chose to focus on a select group of developers instead of expanding its client base, a decision that has been instrumental in driving sustainable growth, he says.

According to Tan, the company has achieved a 100% success rate on all tenders submitted. As a result, it has secured RM3.1 billion in new orders, surpassing its target of RM3 billion.

He attributes the impressive performance to the company’s long-standing relationships with key clients, including Exsim Development Sdn Bhd, Maxim Global Bhd (KL:MAXIM) and Platinum Victory Sdn Bhd. These partnerships are built on reliability and consistent delivery, and not price alone, he emphasises.

“Many developers don’t want just the cheapest contractor. They want someone reliable who delivers quality work and doesn’t complicate things with unnecessary contractual issues. We focus on these kinds of clients. Once trust is built, they keep coming back,” says Tan.

Apart from high-rise residential properties in the Klang Valley and Johor Bahru, Binastra is also involved in the construction of data centres and the redevelopment of old sewage treatment plants (STPs) and Large-Scale Solar (LSS) installations.

Its recent client additions include property developers Greenearth Landmark Sdn Bhd and CPI Land Sdn Bhd, data centre operator AIMS Group and stainless steel manufacturer Bahru Stainless Sdn Bhd.

The company is targeting RM4 billion in new order wins. It has secured RM1.9 billion year to date. Tan remains confident of meeting the full-year target, citing robust demand in Johor from key clients Exsim and Maxim, which are expected to develop more than 11,000 property units, which translates into an estimated contract value of RM3.33 billion.

Sentral Damansara, a new township developed by Exsim Group that is adjacent to Empire Damansara, is the largest contributor of jobs, with five active projects collectively valued at about RM1 billion.

Binastra is currently managing 27 active construction projects, supported by a workforce of 334, up significantly from 132 last year. In the past two months alone, the company has added 70 workers. It has also opened a regional office in Johor Bahru to support its operations in the southern state.

Tan views the ESG theme as a strategic financial lever, and not merely a moral obligation. “Banks are more willing to lend to green projects and the rates are cheaper. It’s the future.”

Binastra Construction recently secured three concessions under the LSS5 scheme, with a total capacity of 56.54mw. These projects are expected to generate engineering, procurement, construction and commissioning (EPCC) contracts worth about RM200 million for Binastra’s 51%-owned subsidiary Binastra Atlantic Sdn Bhd.

“This is just the beginning. We intend to pursue more EPCC opportunities going forward,” says Tan.

Last Monday, Binastra announced a RM305 million contract to install a 65mwp solar photovoltaic system and 200mwh battery storage at Bahru Stainless’ plant in southern Johor. The deal, signed on Oct 7, is a recurrent related party transaction as Tan and executive director Lee Seng Yong have equity interest in Bahru Stainless’ parent company, Worldwide Stainless Sdn Bhd.

Tan says the system will generate 80 million kWh annually, covering 80% of Bahru Stainless’ energy needs. This will help the firm save RM45.6 million and to reduce carbon dioxide emissions by 61,920 tonnes.

The contract is expected to strengthen Binastra’s position in the renewable energy space. Analysts estimate such projects could yield a profit margin of about 8%, notably higher than the typical 5% to 6% seen in conventional construction.

On the sewage treatment front, Tan explains that older STPs are open-based and environmentally obsolete. These facilities are being replaced with modern, enclosed plants equipped with integrated mechanical and electrical systems. Once the new plants are operational, the decommissioned sites — often occupying a substantial amount of land — can be repurposed for mixed-use developments.

Binastra is currently undertaking two STP redevelopment projects: one in Sri Hartamas and another in Taman Bukit Cheras, both in Kuala Lumpur, with a total contract value of RM222.6 million. The contracts were awarded by private developers. Tan believes these mature sites hold significant redevelopment potential and will generate future construction opportunities for the group.

Beyond its green ambitions, Binastra is capitalising on Malaysia’s fast-growing data centre sector. “The next few years will still be strong. All the major US names — Amazon, Google — are already here. Now, China’s tech giants are in the pipeline,” says Tan.

He remains selective though. “I’m very particular about data centre jobs. We are sticking to our niche —15mw to 20mw builds. These are worth about RM1 billion, and that’s sufficient. Everyone has their own market. We’ve delivered a solid data centre project already and proven our capability.”

Binastra is currently executing four data centre projects with a total value of RM1.24 billion. Its remaining order book for these jobs stood at RM874 million as at end-July.

“Data centres are fast paced. A condominium project takes 36 months, but a data centre can be completed in 10 months. The margins may be lower than a condo project, but the turnover is faster,” says Tan.

To strengthen its foothold, Binastra has invested in LF Lansen, which specialises in thermal energy storage systems for data centres. “Data centres can’t afford downtime. We supply buffer tanks that store cooling energy. If the power or chiller fails, these tanks keep the system stable,” he explains.

LF Lansen carries a profit guarantee of RM10 million annually from FY2025 to FY2027. In April, Binastra acquired a 40.8% stake in the firm for RM15 million cash, with a call option to raise its interest to a controlling 51% for RM44.8 million.

The second-stage call option allows Binastra to acquire an additional 10.2% stake at a valuation based on eight times LF Lansen’s FY2025 audited net profit, capped at RM8.7 million. The option is exercisable upon release of the audited accounts and remains valid until Dec 31, 2025.

As at end-March 2025, LF Lansen had an outstanding order book of RM43 million.

For the first half of FY2026 ending Jan 31, Binastra sustained its growth trajectory, posting a 30% year-on-year increase in net profit to RM53.56 million, up from RM40.96 million. Revenue surged 59% to RM653.68 million from RM410.51 million.

In FY2025, net profit more than doubled to RM90.24 million from RM40.77 million, driven by a corresponding rise in revenue to RM946.57 million from RM425.2 million. Its trade receivables soared from RM227.29 million in January 2024 to RM723.7 million in July 2025.

Addressing the increase in receivables, Tan attributes it to the group’s expanded order book and affirmed that the figure remains within normal operating parameters. “We will ensure timely client payments and we are confident in our receivables as we are committed to paying dividends.”

Binastra’s trade receivables — a metric tracking the average time taken to collect payments— stood at about 120 days.

Reflecting his confidence in the group’s financial strength, Tan says Binastra aims to maintain a dividend payout ratio of at least 30% of its net profit, with plans to change from annual to half-yearly distributions. For 1HFY2026, the group declared a dividend of three sen per share, amounting to a payout of RM32.73 million and representing a payout ratio of 61%.

The company’s balance sheet remains robust, with cash holdings of RM107.46 million against total borrowings of RM30.71 million, resulting in a net cash position of RM76.75 million.

In May last year, the group completed a fundraising exercise comprising a RM35 million rights issue and RM70 million private placement, raising gross proceeds of RM105 million. Tan and Lee collectively subscribed for 70% of the rights issue. The proceeds were fully utilised and allocated primarily to formwork equipment purchases and working capital.

Analysts remain bullish on the stock, with the seven research houses covering the counter having a “buy” recommendation. Target prices range from RM2.40 (Affin Hwang Investment Bank) to RM2.85 (TA Securities), with an average of RM2.64, implying an upside potential of 15.7%.

UOB Kay Hian, for one, projects an earnings compound annual growth rate of nearly 30% over the next three years.

At last Thursday’s closing price of RM2.27, Binastra shares were trading at a forward price-earning ratio of 19.05 times. This compares with the industry average of 17 times. 

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