Kerjaya Prospek secures RM112 mln building job from property arm

KUCHING: Kerjaya Prospek Group Bhd (Kerjaya) via its subsidiary Kerjaya Prospek (M) Sdn Bhd has secured an RM111.8 million building job award from its property arm Kerjaya Prospek Property Bhd’s (KPPROP) wholly-owned subsidiary Kerjaya property Sdn Bhd.

The award is for the construction of a 52-storey service apartment located in Setapak, Kuala Lumpur. The construction activities are expected to commence in January 2024 with a construction period of 40 months.

This is Kerjaya’s fourth contract win in its financial year 2024 (FY24), bringing its year to date (YTD) job wins to RM377.9 million and its current outstanding orderbook to RM4.7 billion, equivalent to 4.3-times its FY22 revenue.

Its tender books remain at circa RM2 billion and comprised of industrial warehouse jobs through its joint venture with Samsung C&T, thirdparty building jobs in Klang Valley, and several building reclamation jobs from KPPROP and sister company E&O Bhd.

According to analysts at TA Securities Holdings Bhd (TA Securities), assuming a gross margin of 14 per cent, the project could contribute circa RM10.8 million to Kerjaya’s net earnings throughout the construction period.

Overall, analysts are positive on the win as it was within their respectively FY24 book replenishment assumptions for Kerjaya.

TA Securities maintained its order book replenishment target of RM1.6 billion while the research arm of Kenanga Investment Bank Bhd maintains their RM1.5 billion assumption.

Kenanga Research maintained a favourable view on Kerjaya with an unchanged ‘Outperform’ call and a target price of RM1.90 that is based on a FY25F 14fold price earnings ratio (PER) that is a 30 per cent discount to the group’s revised net asset valuation (RNAV).

It continued to like Kerjaya due to its high-margin formwork construction method, lean and hands-on management, and strong earnings visibility that is supported by a sizeable outstanding orderbook and recurring orders from its property arms and sister companies.

On the other hand, TA Securities maintained a ‘sell’ rating on Kerjaya with an unchanged target price of RM1.64 that is based on a 13-fold 2024 earnings per share.