HongLeong Investment initiates Buy call on Mitrajaya
MITRA (9571) MITRAJAYA HOLDINGS BHD
KUALA LUMPUR: HongLeong Investment Research has initiated its Buy call on Mitrajaya Holdings with a target price of RM1.52, it said in a note on Wednesday.
The research house said Mitrajaya is an under researched hidden gem which offers superior earnings growth at cheap valuations of eight times and 6.5 times FY14-15 price per earnings and decent yields of 3%-5%.
It said the target price is based on 10 times FY15 earnings, inline with its target valuation parameter used for small cap contractors.
For an alternate valuation perspective, at current market capitalisation, investors buying Mitrajaya would be getting its land at 48% discount to market value and all its core business of constructionand property development.
It said Mitrajaya has successfully grown its job wins from less than RM100mil annually during FY08-10 to over RM500mil currently. New job wins year-to-date are at a record RM547mil, surpassing last year’s high of RM501mil.
Mitrajaya’s orderbook of RM1.3bil implies a strong cover of six times FY13 construction revenue, vis-à-vis the sector average of 2.1 times. Its orderbook profile is also relatively “young” with 75% comprising jobs that were secured less than a year ago, mitigating cost overrun risks.
Backed with RM2bn in outstanding tenders, the research house said Mitrajaya aims to hit an orderbook target of RM1.5bil by year end, implying that another RM200mil worth of jobs are forthcoming.
"These tenders are mainly building works for developers, both private and government related," it said.
http://www.thestar.com.my
MITRA (9571) MITRAJAYA HOLDINGS BHD
KUALA LUMPUR: HongLeong Investment Research has initiated its Buy call on Mitrajaya Holdings with a target price of RM1.52, it said in a note on Wednesday.
The research house said Mitrajaya is an under researched hidden gem which offers superior earnings growth at cheap valuations of eight times and 6.5 times FY14-15 price per earnings and decent yields of 3%-5%.
It said the target price is based on 10 times FY15 earnings, inline with its target valuation parameter used for small cap contractors.
For an alternate valuation perspective, at current market capitalisation, investors buying Mitrajaya would be getting its land at 48% discount to market value and all its core business of constructionand property development.
It said Mitrajaya has successfully grown its job wins from less than RM100mil annually during FY08-10 to over RM500mil currently. New job wins year-to-date are at a record RM547mil, surpassing last year’s high of RM501mil.
Mitrajaya’s orderbook of RM1.3bil implies a strong cover of six times FY13 construction revenue, vis-à-vis the sector average of 2.1 times. Its orderbook profile is also relatively “young” with 75% comprising jobs that were secured less than a year ago, mitigating cost overrun risks.
Backed with RM2bn in outstanding tenders, the research house said Mitrajaya aims to hit an orderbook target of RM1.5bil by year end, implying that another RM200mil worth of jobs are forthcoming.
"These tenders are mainly building works for developers, both private and government related," it said.
http://www.thestar.com.my
