• MITRA is one of the HLIB top picks with an institutional target price of RM1.98 (based on SOP), or 67.8% upside. We like MITRA mainly due to its robust orderbook of RM1.8bn (2.4x cover ratio on FY15 construction revenue) and strong property performance in South Africa to sustain earnings trajectory, cushioning weaker domestic property division. Valuations are inexpensive at FY16-17 P/E of 7.5x and 7x respectively.
• Poised to retest RM1.39 following the bullish downtrend line breakout. Last Friday, MITRA share prices jumped 4.4% to RM1.18, accompanied by huge volume of 2.45m shares (104% higher against 3-month average) and closed above key SMAs, signaling more upside ahead amid bottoming up indicators. We expect prices to break the immediate resistance of RM1.22 (15 Jan high) soon. A decisive breakout above RM1.22 will spur prices higher to test RM1.32 (24 Nov high) and our long term price target of RM1.39 (52-week high). Key supports are RM1.14 (30-d SMA) and RM1.10 (uptrend line). Cut loss at RM1.09.
• Attractive risk to reward ratio with 17.8% upside against 7.6% downside. All in, we see an attractive risk to reward ratio for investor with a theoretical entry price of RM1.18 given that the downside to the cut loss zone of RM1.09 is 9 sen (-7.6%) while the upside to the LT price objective of RM1.39 is 21 sen (+17.8%).

Source: Hong Leong Investment Bank Research - 14 Mar 2016