• HLIB Institutional Research has a BUY rating on MITRA with target price of RM2.92, or 55% upside. MITRA remains our top pick amongst the small cap contractors as it offers robust growth prospects (3-year CAGR: 24%) at inexpensive valuations of 9.4x and 7.8x FY15-16 P/E. Dividend yield is also decent at 3.7-4.5% for FY15-16, respectively.
• Strong orderbook and more in the pipeline. Its orderbook currently stands at RM1.8bn, translating to a superior cover of 4.7x FY14 construction revenue (peers average: 2.1x). Momentum is expected to further accelerate in the coming quarters as newer jobs such as the PP1AM housing (RM230m), BNM complex (RM187m), MK22 (RM402m) and Raffels School (RM270m) gain traction.
• YTD job wins currently amount to RM230m vs. management’s full year target of RM1bn and our more conservative assumption of RM500m. Total tenders currently stand at RM1.9bn comprising buildings in the Klang Valley (RM1.4bn) as well as buildings (RM350m) and infra works (RM180m) in Johor. Aside that, MITRA is also a strong contender for the LRT3 station works (RM750- 1,000m) which should take off in 1Q16.
• Poised to break above 52-week high of RM2.08. After hitting new high of RM2.08 on 21 May, MITRA share prices retreated to as low as RM1.78 on 29 May before ending at RM1.88 yesterday.
• We opine that share price is gaining upside momentum, as indicated by “bottom-up” os cillators (RSI, Slow Stochas tics and MACD), and pois ed for a triangle breakout. Further upside targets are RM1.98 and RM2.08, with long term target price of RM2.16 (measurement objective).
• Immediate supports are located at RM1.81 (uptrend channel) and RM1.78 (lower Bollinger band). Cut loss below RM1.72.

Source: Hong Leong Investment Bank Research - 12 Jun 2015