KUALA LUMPUR: Pintaras Jaya Bhd is well-positioned to ride the Singapore construction uptrend and the upcoming rollout of mega projects in Malaysia, MIDF Research said.
The firm said Pintaras Jaya' strong net cash position of RM142.17 million, as of the third quarter (Q3) ended March 31 this year, and commitment in issuing dividends also made the counter attractive.
"We are positive on Pintaras Jaya as it is well-positioned to ride the construction sector uptrend in Singapore, while in Malaysia, the group is ever ready to pounce on piling and foundation works for mega projects such as the Mass Rapid Transit (MRT) 3 that will be rolled out by the government soon.
"Pintaras Jaya's strengths lies in its vast experience, large fleet of machineries and its financial strength in Malaysia with zero gearing.
"We also like its steady recurring income from its metal container manufacturing business and the group's commitment to pay dividends every year," it said in a note today.
MIDF Research said as of December 31, 2021, Pintaras Jaya reported an outstanding construction order book of about RM320 million.
Taking into account work done and the contracts won recently, it estimated that Pintaras Jaya's current outstanding orderbook stood at between RM350 million and RM400 million.
The management's orderbook replenishment targets were RM400 million for FY22 and RM500 million for FY23, said MIDF Research.
"Unlike other construction groups, Pintaras Jaya is in the piling and foundation business, which generally has a contract tenure of about 1.5 years or lower, meaning that the group relies heavily on new jobs every year.
"So far, it has managed to meet its replenishment targets consistently.
"Management's higher target for FY23 reflects its optimism, taking cue from the brighter prospects in Singapore and the upcoming revival of the sector in Malaysia," it added.
MIDF Research has initiated its coverage on Pintaras Jaya with a "Buy" call and target price of RM3.14.