New contract to lift Exsim Hospitality’s earnings

PETALING JAYA: Exsim Hospitality Bhd’s (EH) recent contract win is expected to contribute profit before tax of about RM2.6mil or a 15% margin, over the contract period, consistent with margins from similar projects.

This win could serve as a springboard for EH to capture future opportunities within Binastra Corp Bhd’s robust RM4.9bil outstanding order book as of September 2025, said TA Research.

Assuming a conservative 30% win rate and interior fit-out works account for 15% of total project value, this could translate into a potential pipeline of about RM220mil in additional interior fit-out contracts for EH.

It further strengthens EH’s near-term order book replenishment visibility and supports its earnings sustainability.

Incorporating this latest award and assuming an order book burn rate of RM60mil for the first quarter of financial year 2026 (1Q26), it estimates EH’s outstanding order book at approximately RM161.6mil.

This represents a 1.2 times cover of its financial year 2025 design and fit-in segment revenue, reinforcing its near-term earnings visibility.

TA Research reiterated a “buy” call on EH with an unchanged target price of 54 sen a share, based on 15 times the price-to-earnings ratio (P/E) for the design and fit-out segment and 18 times the P/E for the hospitality division.

TA Research is optimistic on EH’s near-term order book replenishment outlook, as it views EH as the natural frontrunner for interior fit-out works within Exsim Group’s sizeable development pipeline, which carries an estimated undeveloped gross development value of at least RM30bil, based on its channel checks.

This favourable positioning stems from the shared ownership structure between EH and Exsim Group, which supports strong job visibility and recurring project flow.

EH secured a RM17.6mil interior fit-out contract from Binastra, covering the supply, fabrication, delivery, and installation of carpentry works for apartment units.

Binastra Builders serves as the main contractor for the apartment development project.

It continues to favour EH for its position as the strategic beneficiary of Exsim Group’s expansive development pipeline, its hybrid hospitality strategy that ensures earnings visibility and the potential future value unlock through hospitality real estate investment trust.