Data centre exposure drives a structural earnings inflection. MITRA’s involvement in NEXTDC’s KL1 hyperscale campus has expanded to RM578m, anchoring multi-year earnings visibility while offering higher-margin potential versus conventional non-DC jobs.
Strong earnings growth backed by order book and margin expansion. We forecast core earnings growth of 47%/29%/5.2% over FY26F–FY28F, driven by RM1.4bn annual order book replenishment and margin uplift as key projects progress.
Robust order book with upside from data centre pipeline. MITRA’s RM901m order book provides visibility through FY28F, with its growing DC track record enhancing prospects for follow-on contracts.
Property segment offers re-rating catalyst. The RM1.5bn GDV Puchong Prima development supports medium-term earnings, with upside from successful launches and improving take-up.
Initiate BUY with TP of RM1.27 (116.8% upside). Valuation discounts reflect execution risks, but we see scope for re-rating as DC delivery and earnings visibility strengthen.
Key Investment Highlights
Structural Earnings Upside Driven by Data Centre Expansion. MITRA’s entry into the data centre (DC) segment marks a key inflection point in its earnings profile. The Group secured its first DC contract in May 2024—a RM86.6m foundation works package from NEXTDC for the KL1 hyperscale campus—followed by a RM375.5m main works contract in January 2025. Following scope enhancements, alongside an additional RM54m early works contract awarded in March 2026, MITRA’s exposure to the KL1 project now stands at RM578m, anchoring its near- to medium-term earnings visibility.
Importantly, KL1 is expected to be Peninsular Malaysia’s first Tier 4-accredited data centre above 5MW, with a total planned capacity of 65MW. The project’s technical complexity, stringent delivery timelines, and high specification requirements underpin structurally higher margin potential relative to conventional building jobs. As Malaysia rapidly emerges as a regional digital infrastructure hub—driven by hyperscale and enterprise demand across Kuala Lumpur, Johor, and Selangor—we see strong potential for repeat orders and pipeline expansion, positioning MITRA as a solid beneficiary of the DC buildout cycle.
Robust Order Book Underpins Multi-Year Earnings Visibility. Beyond DCs, MITRA’s construction division maintains solid momentum, supported by an outstanding order book of RM901m. Key projects include the NEXTDC KL1 campus, Avisena Specialist Hospital, and the Kedah Science and Technology Park, providing diversified exposure across healthcare, institutional, and commercial segments.
This order book offers clear earnings visibility through FY26F–FY28F, with contributions expected to be progressively recognised as projects advance. Coupled with its proven execution track record and disciplined cost management, MITRA is well positioned to capitalise on upcoming infrastructure spending under Budget 2026, particularly in road, rural, and water-related projects. Notably, its growing track record in data centre construction enhances its competitive positioning in securing future DC-related contracts, a segment with structurally higher margins and stronger demand visibility. We forecast average order book replenishment of RM1.4bn annually over FY26F–FY28F, which should sustain a robust construction pipeline and support continued earnings growth.
Property Segment Set for Reacceleration. MITRA’s property division is poised for a cyclical upturn, anchored by the RM1.5bn GDV Puchong Prima mixed development. The project will be rolled out in three phases, providing sustainable medium-term earnings visibility while diversifying the Group’s income base beyond construction. Near-term catalysts include the Phase 1 launch (RM300m GDV) in 2026, followed by a RM50m residential development targeted for 2027. The Group’s sizeable landbank of over 500 acres offers long-term monetisation upside, while unbilled sales of RM28.5m provide a base level of near-term earnings support. Successful execution and take-up of initial phases could serve as a key rerating catalyst, particularly as sales momentum strengthens.
Valuation and recommendation. We initiate coverage on MITRA with a BUY recommendation and a target price of RM1.27 representing a capital upside of 116.8%, derived from a sum-of parts (SOP) valuation and supported by a three-star ESG rating.
Risks. Margin compression from rising input and labour costs, cash flow volatility from working capital requirements, and execution and concentration risk from large projects.
Disclaimer
The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.
Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.
| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 3.949404 | 3.981238 |
| EUR | 4.633763 | 4.638745 |
| CNY | 0.579561 | 0.580180 |
| HKD | 0.504449 | 0.508017 |
| SGD | 3.094283 | 3.116286 |