MIDF Research keeps Mitrajaya fair value at RM1.56

  • Analyst Reports
  • Monday, 20 Jun 2016

PETALING JAYA: MIDF Research has maintained its fair value of RM1.56 on Mitrajaya Holdings Bhd, which is derived from 11 times financial year 2016 earnings per share forecast of 14.15 sen.

The research house said on Monday that the valuation of 11 times is in line with the average price-earnings ratio among small-mid cap construction players. 

It said that Mitrajaya's financial year 2016 earnings will be supported by outstanding orderbook of RM1.7bil as well as unbilled property sales of RM169.8mil.

It said Mitrajaya is tendering for jobs worth RM3.6bil out of which, RM2.2bil is made up of infrastructure projects and the remaining RM1.4bil are mainly building jobs from developers. 

Topping that, it is preparing for tenders worth RM1bil. For the infrastructure works, it will be focusing on Damansara-Shah Alam Expressway (DASH), Pan Borneo Highway and Petronas’ Refinery and Petrochemical Integrated Development (RAPID) in Pengerang, Johor. 

"We understand that the APPL Engineering-Emax Synergy-Mitrajaya consortium had put in bids for all eight packages for Pan Borneo Highway.

It said that the group has an outstanding orderbook at RM1.69bil which will last the company until 2019. 

The major jobs are MACC Buildings at Precinct 7, Putrajaya (RM286mil), MK22 Condos at Mont Kiara (RM317mil) and PJ Midtown complex building and external works at Seksyen 13, PetalingJaya (RM293mil).

Its property arm is backed by unbilled sales of RM169.8mil, mainly from Wangsa 9 Residency. 

"Income recognition from this project should be higher in the next few quarters as construction works for the first phase is already 35-40% completed. 

"This year, it plans to launch two blocks of 408 apartments worth RM73mil and 24 units of double-storey shop offices at Sungai Rengit, Pengerang valued at RM24mil," it noted.

MIDF added that Mitrajaya’s current project in South Africa is coming to a tail-end with 10% of the remaining land area to be sold.

"It could be able to recognise up to RM26mil for the remaining 73 acres. It could develop 140 units of houses over the next three years there. To replenish its landbank in South Africa, Mitrajaya has bought a parcel of 215 acres for RM10.4mil," it said.

The new piece of land is expected to have a gross development value of RM415.6mil that could be developed over four years.

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