• Our institutional research maintains Mitra (BUY; TP: RM1.95) as a top pick for smallcap contractor, with 89% upside potential. The group sits on a robust orderbook of RM1.8bn (3.5x FY14 revenue) to sustain earnings trajectory and job wins to pick up in 2H (YTD: RM230m) with RM2.8bn worth of tenders in the pipeline
• The stock offers strong earnings CAGR of about 24% from FY14-17 at undemanding valuations of 6.9-8.3x FY15-16 P/E (peers: 10.1x) and decent yields of 4.4-5.2%.
• Poised to break 200-d SMA. After plunging 42% from 3-month high of RM1.38 (28 July) to recent low of RM0.80 (25 Aug), share price has bottomed up steadily to close at RM1.03 on 3 Oct. Given its recent downtrend line breakout and bottoming up hourly indicators, MITRA is poised to break above the long term trend line of 200-d SMA (now at RM1.06) soon.
• A clear breakout above RM1.06 could spur prices higher towards RM1.16 (61.8% FR and 100-d SMA), with our long term objective of RM1.24 (76.4% FR). Immediate supports are pegged at RM1.00 psychological level and RM0.98 (200-h SMA and 30-d SMA). Cut loss at RM0.95.

Source: Hong Leong Investment Bank Research - 5 Oct 2015