Mitrajaya Holdings Berhad - In-Line 1QFY26, Growth Outlook Remains Intact
Tue, 26-May-2026 08:44 am
by Research Team • Apex Research

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MITRA (9571)

Target Price (RM)

1.27

Recommendation

Buy

  • MITRA registered 1QFY26 core net profit (CNP) of RM18m (+8.2% YoY; -25.2% QoQ). This is in line with our (13.2%) expectations.

  • CNP rose 8.2% YoY on stronger Construction revenue, but declined 25.4% QoQ due to slower work recognition, while Property Development reported lower unit sales.

  • MITRA’s outlook remains favourable, supported by stronger FY26 revenue recognition, strategic data centre exposure, its RM696.4m order book, and RM1.4bn average annual order book replenishment driving earnings growth through FY26F–FY28F.

  • Maintain BUY with an unchanged TP of RM1.27, based on sum-of-parts valuation alongside a three-star ESG rating.

Results within expectations. MITRA reported 1QFY26 CNP of RM18m (+8.2% YoY; -25.2% QoQ) representing 13.2% of our full year forecast. This is in line with our expectations given more public holidays during the period and with the Group’s historical revenue being typically skewed towards 2H of the calendar year. CNP was derived after excluding the following items:

  • Bad debts and PPE written off: RM0.008m

  • Gain on disposal of PPE: -RM0.466m

  • Provisions for onerous contracts and liquidated ascertained damages: RM11.947m

  • Unrealised (loss)/gain from currency movements: RM0.195 

 

YoY. CNP rose 8.2% YoY, driven by stronger revenue contribution from the Construction segment. Construction revenue more than doubled, rising 101.9% YoY to RM224.2m, although PBT margin narrowed to 4.4% from 8.7% in 1QFY25. Meanwhile, Property Development revenue declined 83.2% YoY to RM3.1m, mainly due to lower unit sales from ongoing projects, while segmental PBT margin improved to 17.7% from 15.7%.

 

QoQ. CNP declined 25.4% QoQ, mainly due to slower work recognition in the Construction segment. Construction revenue fell 16.7% QoQ, while PBT margin compressed to 4.4% from 10.7%. Property Development revenue declined 88.9% QoQ, with PBT margin falling to 17.7% from 39.2%, reflecting weaker unit sales during the quarter.

 

Outlook. We continue to view MITRA favourably, with topline growth supported by stronger revenue recognition as FY26 progresses, underpinned by the Construction segment, its strategic data centre project exposure, and RM696.4m order book. While 1QFY26 earnings were seasonally softer due to public holidays and the Group’s typically weaker revenue recognition in 1H, MITRA’s exposure to NEXTDC’s KL1 hyperscale data centre project should support earnings through FY26–FY27, alongside potentially higher margins from data centre works. Regarding margin pressures from the current macroeconomic environment, management believes these risks can be partly mitigated through disciplined tendering, prudent pricing, and cost controls. Overall, we continue to expect sustained earnings growth over FY26F–FY28F, supported by progressive order book execution and average annual order book replenishment of RM1.4bn.

 

Valuation. Maintain our BUY rating on MITRA with an unchanged TP of RM1.27, based on a sum-of-parts valuation alongside 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.

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