Hot Stock Mitrajaya rises 3.76% after Kenanga IB Research starts coverage

Hot Stock
Mitrajaya rises 3.76% after Kenanga IB Research starts coverage

KUALA LUMPUR (June 24): Shars of Mitrajaya Holdings Bhd rose 3.76% in early trade this morning after Kenanga IB Research inititiated coverage on the stock with an “Outperform” rating at RM1.86 and a target price of RM2.35 and said this under-researched stock was one of the good quality small-mid cap stocks with strong earnings growth visibility and compelling prospects.
At 9.30am, Mitrajaya rose 7 sen to RM1.93 with 1.6 million shares done.
In a note today, the research house said key investment merits included: (i) superb potential earnings growth in the near medium-term backed by record high orderbook achieved early this year, (ii) targeting to sustain the record-high orderbook by replenishing another RM1.0 billion new contracts this year, (iii) margin that is above industry average, (iv) being one of the potential beneficiaries of 11MP, (v) property division supported by strategic location of land (next to LRT stations), (vi) strong balance sheet with net gearing of 0.2x vs industry’s net gearing of 0.5x.
“Interestingly, despite the strong fundamentals, the stock is still trading at single digit PER valuation, i.e. Fwd-PER of 7.4x.
“This is relatively cheaper than that of small-mid cap contractors’ Fwd-PER range of 10-14x.
“Our target price of RM2.35 implies 9.4x PER that offers potential upside of 26.3%,” it said.