KUALA LUMPUR: Pintaras Jaya Bhd is expected to ride on the recovery of Singapore's construction industry given its sizeable footprint there, RHB Research said.

The firm said Singapore's contribution towards the company's revenue stood at 80 per cent.

"As such, the group is not highly exposed to the murky outlook of mega projects in Malaysia. 

"Having a net cash position as at December 31, 2021 will also enable the group to take on larger jobs going forward. 

"Valuation remains attractive – trading at a 35 per cent discount from its three-year average," it said in a note today.

RHB Research said Pintaras' latest construction orderbook stood at RM320 million, translating into an orderbook or revenue cover ratio of less than 1.0x – lower than the average of two times among piling companies under the firm's coverage. 

However, it said this was not a point of concern since most of its contract awards had tenures shorter than 12 months, leading to fast completion of projects. 

"We also take comfort from its average replenishment rate of RM400 million in the past three financial years. 

"Looking ahead, we opine that Pintaras will be well positioned to benefit from the pickup in Singapore's construction sector," it added.

Singapore's Building and Construction Authority (BCA) has projected construction demand to range between S$25 billion-S$32 billion from 2023-2026 – back to pre-pandemic levels. 

This will be supported by the strong pipeline of public housing projects, as well as healthcare development and infrastructure work, including the Cross Island MRT Line for which it has previous experience in. 

RHB Research said it had made no changes to Pintaras' FY22-FY24 earnings.

The firm maintained its "Buy" call on Pintaras, with an ucnahnged target price of RM3.24.