Bina Puri Holdings Berhad (BPuri - 5932) is principally involves in construction and properties and quarry operation. The group also had recurring income business model such as highway concessionary, diesel powered power plants and mall management.
Bina Puri history can be dated back into 1975 when construction and development is robust and highly in demand. Throughout the journey, Bina Puri had diversify into different stream of revenue in order to enhance shareholder return.
The past couple of years had been challenging for Bina Puri, especially on the delivery of KLIA 2. Albeit the hiccups and delay, Bina Puri had managed to pull over the challenges. Looking forward, Bina Puri will set to develop more recurring income business in the future. Bina Puri will be looking to see a strong recurring revenue on 2018 by growing it's existing recurring income business portfolio.
According to the chart, Bina Puri had started to come off from a long term down trend line. The successful break out from the downtrend line will indicate a new reversal to the uptrend on Bina Puri. Bina Puri will be looking to trade higher with greater volume participation with the first resistant line at RM 0.55.
Bina Puri had been consolidating at the range of RM 0.45 for 4 months. Prior to that, Bina Puri had underwent successful private placement at the price of RM 0.50 during the earlier months of 2015. The current technical outlook for Bina Puri will be very attractive for technical trader to take early position on a possible uptrend drive.
Driving Up Recurring Income Business
Bina
Puri derives most of its revenue from it's construction outfit. The
construction arm contributed more than RM 1billion in revenue for the
year 2010, 2011 and 2012. While doing so, Bina Puri had started ventured
into mini diesel power plant in Indonesia and had saw steady streams of
revenue since 2010, growing from RM 1.6million to the current
contribution of RM 10.38 million as of FYE 2014.Currently, there are 7 mini diesel power plant totaling 28 MW that is up and running. The latest 4.2 MW mini hydro power plant in the south of Sulawesi will start to see contribution starting February 2016, putting Bina Puri total power generation to 32.2 MW. The 4.2 MW mini hydro power plant is expected to contributed at least RM 5million a year in revenue.
The demand of power plant in Indonesia continue to be robust. Beside Bina Puri, Scable (Sarawak Cable) had also ventured into the power plant business in Indonesia as demand for energy in Indonesia continue to pick up in a quick pace.
With the current low crude oil prices, this will ultimately give Bina Puri 80% owned PT Megapower Makmur a better profit margin considering the lower input cost. The continuation of low crude oil prices will continue to help fossil fueled power plant in their bottom line, considering their power purchase price is fixed.
Bina Puri will also be building another 4 to 5 more mini power plant (combination of diesel and hydro) in the next 3 to 4 years. The group will be spinning off it's PT Megapower Makmur for a public listing in the Indonesian Stock Exchange (IDX) by this year, with a target to raise USD 4 million in order to drive up the expansion process through public funding. The listing which is targeted to be completed during the 3Q of 2016 will be one of the major rerating catalyst for Bina Puri in the coming days.
With the rising up Indonesian market for more industrial and commercialization, Indonesia will be seeing great demand in the sector of power generation for the next 5 years, putting up bright prospectus for Bina Puri in it's power asset business in Indonesia.
Fired Up on More Construction Projects
Albeit the diversification towards more recurring income based business, there is no slow down in filling up with more construction projects for 2016. Current to date, Bina Puri remaining balance of book order still stands at a healthy RM 1.9 billion that can keep the group busy for the next 3 years. Amongst them, the Melawati Mall, Kompleks LKIM Kuching, Bunus Sewerage Treatment Plant, Medini Building and UIO Facilities Pengerang made up RM 1.1 billion.
Bina Puri is confident in replenishing book order by RM 1 billion in 2016. Key government projects such as the RM 27 billion Pan Borneo Highway, RM 1.6 billion Krai Highway, RM 9 billion LRT 3, RM 40 billion HSR, RM 28 billion MRT II and RM 2.5 billion BRT projects in KL & Kota Kinabalu will put construction company busy for the next 5 years.
Close sources had indicated that Bina Puri will be involved in several high profile construction, consisting of Pan Borneo Highway packages, LRT 3 packages, DASH highway packages as well as BRT KK projects, which will easily sum up more than RM 4 billion. Bina Puri remains a favorable contractor in Sarawak for being one of the panel contractor for CMSB.
Summary
Bina Puri remains an interesting company to be vested in based on
- Growing recurring income business from Power Plant and Mall Management
- PT Megapower Makmur to be spin off for Public Listing in IDX (Indonesia Stock Exchange), raising USD 4 million
- Lower Crude Oil to contribute a better profit margin in diesel power plant
- Bina Puri to see order book replenished by at least RM 1 billion in 2016.
- Existing Order Book at RM 1.9 billion.
- LATAR highway to see profit generation by end of 2018.
- Current price of RM 0.45 resemble a 10% discount from private placement price of RM 0.50
- Current chart showing technical break out from long term downtrend.
- Trading at more than 50% discount from NTA of RM 0.96
Charge along with Bina Puri? Don't miss out
Bone's TP : RM 0.60
Cheers and have a nice day
Regards,
Bone
BPURI (5932) - Bina Puri - Bricks of Power
http://bonescythe.blogspot.my/2016/01/bina-puri-bricks-of-power.html
BPURI, BPURI (5932), 5932, EN5932, KLSE:BPURI, Investing, Bonescythe Stock Watch
