HLIB bullish on Mi­tra­jaya on con­tract win, sets RM1.95 tar­get price

New Straits Times - - Business -

KUALA LUMPUR: Hong Leong In­vest­ment Bank Re­search (HLIB) has main­tained its “buy” call on Mi­tra­jaya Hold­ings Bhd with RM1.95 tar­get price af­ter the com­pany se­cured a RM160 mil­lion con­tract to build a higher learn­ing in­sti­tu­tion.

Yes­ter­day, HLIB said the con­tract, Mi­tra­jaya’s sec­ond for the year, brought the value of its year-to-date (YTD) job wins to RM434 mil­lion com­pared with RM920 mil­lion for fi­nan­cial year (FY) 2016.

“The or­der book stood at RM1.5 bil­lion as at end FY2016 and as­sum­ing a burn rate of RM220 mil­lion in the first quar­ter of this year, cou­pled with YTD job wins of RM434 mil­lion, this would place the cur­rent or­der level at RM1.7 bil­lion.

“This trans­lates to a healthy cover ra­tio of two times on FY2016 con­struc­tion rev­enue,” the in­vest­ment bank added.

The re­search firm also said Mi­tra­jaya’s man­age­ment was gun­ning for RM1 bil­lion in new job wins for FY2017, which is now at 43 per cent and in line with its tar­get.

Mean­while, Ke­nanga In­vest­ment Bank Bhd main­tained the tar­get price for Mitra at RM1.49 with an “out­per­form” rat­ing on the risks of lower-than-ex­pected mar­gins, de­lay in con­struc­tion works, lower-than-ex­pected or­der book re­plen­ish­ment and lower-than-ex­pected prop­erty sales.

Mi­tra­jaya shares closed at RM1.37 on Bursa Malaysia yes­ter­day.

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