• MITRA’s 1HFY26 core net profit of RM24.8m (-36.5% YoY) accounted for 18% of our FY26F forecast and 18% of consensus estimates, which we deem the results below our expectation.
• The reported PBT of RM25.3m (+179.9% QoQ) is flattered by a RM11.95m reversal of onerous-contract/LAD provisions booked in 1QFY26 – excluding this, underlying 2QFY26 trends actually softened.
• MITRA’s outstanding order book fell to c.RM508.4m from RM696.4m, highlighting the need for stronger order replenishment to support future revenue visibility.
• We maintain our FY26F/FY27F/FY28F CNP forecasts at RM137.0m/RM180.5m/RM189.2m, respectively, pending further clarity from management.
• We maintain BUY with an unchanged TP of RM1.27, based on sum-of-parts valuation. We will revisit our valuation upon obtaining further clarity from management.
Results below expectations. MITRA reported 2QFY26 core net profit of RM6.7m (-69.8% YoY, - 62.6% QoQ), after adjusting for gain on disposal of PPE (RM0.22m), reversal of provisions for onerous contracts and liquidated ascertained damages (RM11.95m), and forex gain (RM0.13m). This brought 1HFY26 core net profit to RM24.8m (-36.5% YoY), representing only 18% of our FY26F forecast and 18% of consensus estimates. We deem this below our expectations, even though the Group's historical revenue is typically skewed towards 2H of the financial year. The seasonally expected 2H acceleration now needs to be considerably steeper than previously modelled.
QoQ. Revenue fell 19.3% QoQ to RM185.4m as Construction billings eased from the strong 1QFY26, but reported PBT rose 179.9% QoQ to RM25.3m – almost entirely a function of the RM11.95m provision reversal. Core net profit, once normalised, actually fell 62.6% QoQ to RM6.7m (1QFY26: RM18.0m).
YoY. Group revenue rose 12.2% YoY to RM185.4m, driven by continued Construction division momentum (+24.3% YoY), even as Property Development revenue nearly halved. Core net profit declined 69.8% YoY to RM6.7m (2QFY25: RM22.3m), as the prior year's quarter did not carry a comparable one-off provision credit.
YTD. 1HFY26 revenue rose 39.9% YoY to RM415.0m, led by Construction (+58.5% YoY to RM399.5m), while Property Development fell 72.3% YoY to RM11.5m on lower unit sales. Core net profit fell 36.5% YoY to RM24.8m, as 6MFY25 had benefited from a smaller net provision drag and higher bad-debt-related base effects that flattered the prior year's core adjustment.
Outlook. We remain constructive on MITRA's medium-term trajectory but flag several developments that temper near-term visibility. Order book erosion is a key concern: the disclosed order book has fallen to RM508.4m, down from RM696.4m referenced in our 1QFY26 note — a gap that needs to close via replenishment closer to the RM1.4bn average annual pace assumed in our model, or FY27F to FY28F revenue visibility could come under pressure. On the Property pipeline, the Puchong Prima mixed development has completed earthworks on Phase 1, with piling expected to commence September 2026 – a medium-term Property Development contributor, though not immediate. Separately, the RM54.35m Final Arbitration Award stands out as a clean, one-off positive for cash flow, potentially supporting debt reduction or special dividend capacity, though the timing of the remaining collection depends on enforcement proceedings for two outstanding contracts. The durian plantation, meanwhile, remains loss-making, with contribution still one to two years away as trees reach fruit-bearing maturity. Taken together, for MITRA to hit our current FY26F core net profit of RM137.0m, 2HFY26 would need to deliver more than RM112.2m, which represents a considerable acceleration.
Earnings Revision. We maintain our FY26F/FY27F/FY28F core net profit of RM137.0m/RM180.5m/RM189.2m, respectively. We will revisit our earnings forecasts upon obtaining further clarity from management.
Valuation. We maintain our BUY recommendation on MITRA with an unchanged TP of RM1.27, based on a sum-of-parts valuation, alongside a three-star ESG rating. We will revisit our sum-ofparts valuation following management updates, particularly on the Group’s property development take-up rate.
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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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.065852 | 4.097386 |
| EUR | 4.589381 | 4.597416 |
| CNY | 0.610175 | 0.610647 |
| HKD | 0.518032 | 0.522054 |
| SGD | 3.177971 | 3.202709 |