Is Mitrajaya Share Price Trading Close to All Time High Sustainable?

Mitrajaya Holdings Bhd through its principal subsidiary, Pembinaan Mitrajaya Sdn Bhd, has created for itself an enviable track record of successful projects in construction and civil engineering related fields. Mitrajaya has long been a major player in helping Malaysia become a nation with modern infrastructure, as well as providing quality living and working environments. It has also played a significant role in major national projects such as the Kuala Lumpur International Airport (KLIA), KL's Light Rail Transit System, the CyberJaya Flagship Zone and numerous other projects.

Mitrajaya is now a multi-national conglomerate with businesses in a diverse range of industries, among them, construction, property development, international projects, manufacturing as well as healthcare.

Based on the full year Financial Year (FY) 2015 results, Mitrajaya achieved RM 891 million turnover, which is considered to be mid to large size enterprise based on turnover value. Other aspects of the company’s latest financial results are illustrated in the table below.

Over the latest past 5 FY, Mitrajaya’s revenue has increased 3.4 folds from RM 261 million in FY2011 to RM 891 million in FY2015. This also translates to an average year to year growth of 35.82%. Net profit wise, Mitrajaya experience a great dip in net profit during FY2012 and FY2013 however rebound back quickly and achieved record high net profit in FY2015. In general, its net profit has increased 2 fold within the 5 financial year window from RM 41 million in FY2011, to RM 87 million in FY 2015.

Net profit margin wise, Mitrajaya scores a 9.84%, which is acceptable for a conglomerate company. Return On equity (ROE) at 17.47% is a good score for a company which has businesses in various sectors and multiple geographical locations.

On company’s debt, Mitrajaya has an acceptable total debt to equity ratio at 0.34, meaning 34% of its company value are from long and short term borrowings. The company’s current ratio has a healthy value at 1.83 however its cash ratio is very low at 0.04, which will not be optimistic for the company if the economy climate turns bad.

In terms of dividend, Mitrajaya pays a relatively high 3.50% dividend yield. It is also a great sign that Mitrajaya’s dividend payout ratio is low at 0.35, meaning that the company still retains majority of its earnings for capital expansion plus reducing long term debt.

In conclusion, Mitrajaya is a mid to large size enterprise with good fundamentals for having great increasing trends for both revenue and net profit, and it is getting more evident in recent years. Looking at the Trailing Twelve Months (TTM) financial figures (based on released quarterly results till Mar 2016 quarter), both revenue and net profit of Mitrajaya are projected to increase as much as 34% and 57% respectively. These explains why currently Mitrajaya is trading close to its all-time high as their revenue and net profit are projected to have tremendous growth.

For short term wise it’s all time high share price should be looking positive. However, as 86% of the company’s revenue is contributed from the construction industry, recent challenges such as oversupply of properties, GST implementation and stricter home loan approvals are seen as barriers for the construction sector to keep up its growth. Hence for Mitrajaya’s share price to continue soaring greater heights over the longer term, these challenges will need to be overcome.

Mitrajaya has just released its Q2 result on 18^th Aug 2016. Next quarterly results announcement should be on the month of Nov 2016 for Q3 results.

iVolume Spread Analysis (iVSA) & comments based on iVSAChart software – Mitrajaya

On Mitrajaya 6-month’s weekly iVSAChart, the stock has completed its base building at RM1.30 level and beginning to lift higher. Despite presence of sellers to take profit along the uptrend, Mitrajaya has overcame it and continued to go higher which signified strengths in the background. The stock should able to go higher now as it is still in a nice weekly uptrend so far.

Interested to learn more?

- Join our annual Investment & Market Outlook Conference on 28 Aug 2016. Free door gift WORTH RM50 awaits you. Find out more via: https://www.ivsachart.com/investconference2016.php

- Free eBook available now! Click this URL to get your free eBook of “Get Rich with Dividends by Bill Wermine and Martin Wong”: http://ebook.ivsachart.com/

- Find out more about iVSAChart events via: https://www.ivsachart.com/events.php

- Follow & Like us on Facebook via: https://www.facebook.com/priceandvolumeinklse/

- Contact us via: email at sales@ivsachart.com or Call/WhatsApp at +6011 2125 8389/ +6018 286 9809/ +6019 645 3376

This article only serves as reference information and does not constitute a buy or sell call. Conduct your own research and assessment before deciding to buy or sell any stock. If you decide to buy or sell any stock, you are responsible for your own decision and associated risks.