Kerjaya Prospek Group Bhd - Strategic Joint Venture Formation and Land Bank Growth
Wed, 02-Jul-2025 07:20 am
by Team Coverage • Apex Research

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KERJAYA (7161)

Target Price (RM)

2.50

Recommendation

Buy

  • KERJAYA has entered into a 60:40 joint venture agreement with Aspen Vision Tanjung Sdn Bhd to undertake a mixed-use development in Tanjung Bungah, Penang.

  • The Group is also acquiring three freehold land parcels, measuring a total land area of approximately 7.4-ac, in Kuchai Lama for a cumulative consideration of RM112.8m.

  • Maintain BUY recommendation with an unchanged TP of RM2.50, based assigned 15.0x P/E multiple to its FY26F EPS of 16.6 sen, along with a three-star ESG rating.

 

Joint Venture to Undertake Mixed-Use Development. KERJAYA, through its wholly-owned subsidiary, Kerjaya Prospek Ventures Sdn. Bhd. (KPV), has entered into a joint venture agreement alongside a subscription and shareholders agreement with Aspen Vision Tanjung Sdn. Bhd. (AVT), a subsidiary of Singapore-listed Aspen (Group) Holdings Limited, to jointly develop two freehold land parcels measuring 4.5-ac in Tanjung Bungah, Penang.

 

This development will be completed via a special purpose vehicle, namely Tanjung Bungah Development Sdn. Bhd. (TBD), in which KPV holds a 60% stake and AVT holds the remaining 40%. The land, acquired from Hong Hong Distribution Sdn. Bhd. (HHD), shall be purchased for a total consideration of RM117m – comprising RM105m in cash and RM12m in in-kind property units. Purchase will be funded through bank borrowings and internal resources. The transactions are expected to be completed by Dec 2025. The gross development value of the project has yet to be determined.

 

Increasing Land Bank Reserves. KERJAYA has entered into 3 separate sale and purchase agreements to acquire three parcels of strategically located freehold land at Jalan Puchong, Kuala Lumpur via its wholly-owned subsidiary, Senandung Raya Sdn. Bhd. The three parcels of land, measuring a total of approximately 7.4-ac, will be purchased for a sum of RM112.8m, funded through a mix of internally generated funds and/or bank borrowings. The transactions are expected to be completed by Sep 2025 and will increase the Group’s land bank to 68-ac. The exact use of the land has not been determined.

 

Outlook. We view this development positively as it expands the Group’s project pipeline to capture future market opportunities.

 

Earnings Revision. No change to our earnings forecast pending further disclosures from management.

 

Valuation & Recommendation. We maintain our BUY recommendation on KERJAYA, with an unchanged TP of RM2.50, based assigned 15.0x P/E multiple to its FY26F EPS of 16.6 sen, along with a three-star ESG rating.

 

Risks. Rising material costs, labour shortages, and high-rise office oversupply in the property sector.

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