KUCHING: Mitrajaya Holdings Bhd (Mitrajaya), which is tendering for jobs worth RM3.6 billion, is reportedly looking for more infrastructure jobs, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) says.
According to MIDF Research, out of the RM3.6 billion, RM2.2 billion is made up of infrastructure projects and the remaining RM1.4 billion are mainly building jobs from developers.
“Topping that, it is preparing for tenders worth RM1 billion. 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,” the research arm said.
MIDF Research noted that outstanding orderbook at RM1.69 billion that will last the company until 2019.
It further noted that the major jobs are: MACC Buildings at Precinct 7, Putrajaya (RM286 million), MK22 Condos at Mont Kiara (RM317 million) and PJ Midtown complex building and external works at Seksyen 13, Petaling Jaya (RM293 million).
On Mitrajaya’s property arm, MIDF Research highlighted that it is backed by unbilled sales of RM169.8 million, 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 to 40 per cent completed.
“This year, it plans to launch two blocks of 408 apartments worth RM73 million and 24 units of double-storey shop offices at Sungai Rengit, Pengerang valued at RM24 million,” the research arm said.
On a side note, MIDF Research pointed out that Mitrajaya’s current project in South Africa is coming to a tail-end with 10 per cent of the remaining land area to be sold.
The research arm noted that it could be able to recognise up to RM26 million for the remaining 73 acres and 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 RM10.4 million,” the research arm said.
“The new piece of land is expected to have a gross development value of RM415.6 million that could be developed over four years.”
All in, MIDF Research maintained its fair value for Mitrajaya which was derived from 11-fold financial year 2016 (FY16) earnings per share (EPS) forecast of 14.15sen.
The research arm said that the valuation of 11-fold was in line with the average price earnigns ratio (PER) among small-mid cap construction players.
“Its FY16F earnings will be supported by outstanding orderbook of RM1.7 billion as well as unbilled property sales of RM169.8 million,” the research arm added.